Fitch reviews Industrial Bank of Korea hybrids

Fitch Ratings said it placed the BB+ rating on Industrial Bank of Korea's (IBK; AA-/stable) Basel III additional tier 1 hybrid notes on rating watch positive.

The action follows Fitch's Dec. 12 publication of “Exposure Draft: Bank Rating Criteria.”

“The exposure draft provides scope for the rating of a hybrid security issued by a policy bank, such as IBK, to be notched from the issuer's long-term issuer default rating (IDR) if government support can and will effectively be used to neutralise the security's non-performance risk,” Fitch said in a news release.

“The exposure draft also requires that the issue rating be capped at a level based on its IDR category if the security has going-concern loss-absorbing features.”

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