Moody's rates IBK notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to the Industrial Bank of Korea's proposed $200 million lower tier II subordinated notes due 2015, under the $2 billion global medium-term note program.

Moody's said the outlook for the rating is negative in line with the outlook on Korea's sovereign ratings.

Moody's noted the rating is underpinned by Industrial Bank of Korea's role as one of Korea's three policy banks and provider of financing to small- and medium-sized enterprises (SMEs) in the country. Industrial Bank of Korea is the primary vehicle of specialized SME funding in Korea, particularly to small-scale SMEs which are traditionally under-served by commercial banks.

The rating also takes into consideration the government of Korea's legal obligation to replenish any deficit that may arise if reserves are insufficient to cover annual net losses, as stipulated under the Industrial Bank of Korea Act. This support feature serves to mitigate potential negative consequences from its policy function, which contributes to its weaker-than-average financial fundamentals.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.