January 13, 2014 / 3:46 AM / 4 years ago

Fitch Rates Korea Development Bank's Senior Unsecured USD Notes 'AA-(EXP)'

(The following statement was released by the rating agency) SINGAPORE/SEOUL, January 12 (Fitch) Fitch Ratings has assigned Korea Development Bank's (KDB) proposed long-term senior unsecured US dollar-denominated notes an expected 'AA-(EXP)' rating. The notes will be issued in two tranches - floating rate with three-year maturity and fixed rate with ten-year maturity - under the bank's existing US shelf programme, which was last updated on 24 June 2012 at the US Securities and Exchange Commission. The issue size has yet to be determined. The proceeds will be used for KDB's general operations, including repayment of maturing 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 at the same level as KDB's Long-Term Foreign-Currency Issuer Default Rating as they will constitute direct, unconditional, unsecured and unsubordinated obligations of the bank. The bank's IDR is equalised with South Korea's rating, reflecting the de facto solvency guarantee provided by the government to KDB as per Article 44 of the KDB Act. KDB is effectively 100% owned by the government (9.7% directly and 90.3% through Korea Finance Corporation (AA-/Stable)). RATING SENSITIVITIES The ratings of KDB would be directly affected by changes to South Korea's ratings or to the solvency guarantee under the KDB Act. Fitch does not expect any significant change to either. KDB is one of South Korea's key policy banks. The South Korean government in August 2013 proposed a plan to halt KDB's privatisation, though the plan is subject to the National Assembly's approval. Contacts: Primary Analyst Mihwa Park Associate Director +65 6796 7238 Fitch Ratings Singapore Pte Ltd 6 Temasek Boulevard #35-05 Suntec Tower Four Singapore 038986 Secondary Analyst Heakyu Chang Director +82 2 3278 8363 Committee Chairperson Tim Roche Senior Director +612 8256 0310 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available at www.fitchratings.com. Applicable criteria "Global Financial Institutions Rating Criteria", dated 15 August 2012, are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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