Moody's extends positive review for Korea Exchange Bank

Moody's Investors Service said it extended its review for possible upgrade for Korea Exchange Bank's foreign-currency senior subordinated debt of A2/A3 and global local-currency deposit of A2. All other ratings remain unaffected.

The action follows news that HSBC Asia Pacific Holdings (UK) Ltd. (with ratings of B+/Aa1) and LSF-KEB Holdings SCA have agreed to extend the deadline to July 31 from April 30 for HSBC Asia's proposed acquisition of a 51.02% stake in the bank.

Moody's said there are several obstacles in completing the transaction. The deal needs regulatory approvals. But a regulatory controversy surrounding KEB Holdings' initial purchase of its stake in the bank in October 2003 has made it difficult for it to sell holdings, the agency said.

This issue has already scuttled Kookmin Bank's proposed acquisition in 2006 of KEB Holdings' stake in the bank, the agency said, and while the Korean government has recently expressed its desire to resolve these issues, there is no clear deadline for resolution.

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