Moody's considers Korea Exchange Bank for upgrade

Moody's Investors Service said it placed Korea Exchange Bank's A2 foreign-currency long-term senior debt rating under review for upgrade.

The review follows an announcement that Hana Financial Group intends to increase its stake in Korea Exchange Bank to 100% from 60% through a share swap. The agency said it expects to upgrade Korea Exchange Bank's A2 senior debt rating by one notch to the level of the stronger Hana Bank.

"However, the swap could be a financial burden on Hana Financial Group and Korea Exchange Bank, as they will need to purchase shares from shareholders who object to the deal. We would therefore consider maintaining the ratings for Korea Exchange Bank if such a burden becomes substantial, even though the share swap will automatically be canceled if the purchase amount exceeds KRW 1 trillion either for Hana Financial Group or Korea Exchange Bank," Young Il Choi, a Moody's vice president and senior credit officer, said in a an agency news release.

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