Moody's rates Shinhan Bank notes Baa1(hyb)

Moody's Investors Service said it assigned a Baa1(hyb) rating to Shinhan Bank's tier 2 subordinated U.N. sustainable development goals notes.

The notes are a drawdown from the bank's $6 billion global medium-term note program.

The proceeds will be used to finance loans falling under eligible green or social projects identified in Shinhan Bank's sustainable development goals bond framework published in March 2019, Moody's said.

While the tier 2 subordinated notes are technically contractually loss absorbing at the point of non-viability, the loss absorption language is linked to Korea's statute, which in Moody's view lowers the uncertainty over the timing of loss absorption that is normally inherent in purely contractual non-viability securities, the agency said.

The ratings reflect its strong profitability and asset quality with limited volatility, stable funding and liquidity and solid capitalization against the high double leverage ratio of its parent, Shinhan Financial Group Co., Ltd., Moody's said.

The ratings do not incorporate an uplift for government support because the agency said it assumes only a low level of support for bonds with such loss absorption features.

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