S&P upgrades Korea Development Bank

Standard & Poor's said it raised the long-term foreign-currency issuer and issue ratings on Korea Development Bank to A+ from A and removed the ratings from CreditWatch with positive implications, where they were initially placed in August 2013.

The agency also said it raised to A+ from A the rating on its $350 million senior unsecured note issued by Doosan Infracore Co. Ltd. The notes are guaranteed by Korea Development Bank, which has a 4½% coupon and is due Nov. 23, 2016.

S&P also affirmed the A-1 short-term issuer credit rating on the bank.

The outlook is stable.

The CreditWatch positive followed the government's Aug. 27 announcement that it would redefine the policy roles for government-related financial institutions, S&P said.

The Korean government plans to abolish its privatization plan for the bank, which was announced in 2008, the agency said, and it plans to merge Korea Finance Corp. back into Korea Development Bank by July 2014.

The upgrade primarily reflects an opinion that the government will most likely abolish the privatization plan, S&P said.

Korea Development Bank also has been more active in undertaking a policy banking role and has reduced its commercial lines of banking businesses under the new administration, the agency added.

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