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April 24 (The following statement was released by the rating agency)
Fitch Ratings has assigned the Export-Import Bank of Korea's (KEXIM) proposed senior unsecured notes an expected rating of 'AA-(EXP)'. The size of the notes has yet to be determined.
The notes will be issued under the bank's existing USD15bn euro medium term note programme, last updated on 28 March 2013. The proceeds from the new issue will be used for the bank's general purposes, including rolling over and/or repaying maturing foreign currency debt and other obligations. The final rating is contingent upon the receipt of final documents conforming to the information already received.
Key Rating Drivers
The notes are rated on a par with South Korea's Long-Term Issuer Default Rating (AA-/Stable), reflecting a de-facto solvency guarantee by the Korean government. According to Article 37 of the Export-Import Bank of Korea Act, the government is responsible for any losses incurred by the bank but not covered by the bank's reserves. KEXIM is effectively 100%-owned by the state (67.5% directly, 16.3% through Bank of Korea, and 16.2% through Korea Finance Corporation (AA-/Stable)).
The ratings of KEXIM would be directly affected if South Korea's sovereign ratings or the solvency guarantee of the KEXIM Act were to change. Fitch does not expect any significant change to either.
KEXIM is one of the key policy banks in South Korea. The bank was established in 1976 under the Export-Import Bank of Korea Act to provide export, import and overseas investment credit.