Fitch rates Shinsegae notes A

Fitch Ratings said it assigned an expected A rating to Shinsegae Inc.’s proposed dollar-denominated guaranteed subordinated notes.

The rating reflects the credit enhancement provided to investors by the guarantee from Kookmin Bank, Fitch said, and its unconditional and irrevocable guarantee.

The note is rated at the same level as Kookmin Bank’s long-term issuer default rating as the notes are direct, general, unsubordinated and unconditional obligations of Kookmin Bank thanks to the guarantee. The notes rank at least pari passu with all other present and future unsubordinated and unsecured obligations of Kookmin Bank, Fitch said.

Shinsegae’s standalone credit strength is not a consideration in the instrument rating as the guarantee remains in force even if Shinsegae is declared bankrupt, the agency added.

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