S&P: Shinhan Bank notes BBB+

S&P said it assigned a BBB+ long-term issue rating to proposed dollar-denominated Basel III tier-2 subordinated notes of Shinhan Bank.

The notes will be drawn down from the bank's subordinated tranche under its $6 billion global medium-term notes program.

The subordinated notes are intended as Basel III tier 2 regulatory capital for Shinhan Bank and will be direct, unsecured and subordinated to senior creditors; claims, S&P said.

The BBB+ issue rating is one notch below the A- stand-alone credit profile on Shinhan Bank, the agency said.

Based on the agency’s hybrid capital criteria, the notching reflects the risk related to subordination, but it does not reflect the risk of write-down and waiver of principal and interest payments upon the occurrence of a non-viability event, S&P explained.

The agency said it believes all Korean banks, including Shinhan Bank, will likely receive extraordinary support from the government in a pre-emptive manner and at a relatively early stage if they were to come under financial stress, based on the government's track record.

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