S&P affirms Kexim

Standard & Poor's said it has affirmed the A senior unsecured foreign-currency debt rating on Export-Import Bank of Korea's (foreign-currency A/stable/A-1) Mexican peso global 8.61% fixed-rate notes due Oct. 11, 2017.

The notes were first issued on Oct. 11, 2007, with an issue size of Ps. 1 billion. Kexim is upsizing the issue by Ps. 800 million. S&P said it does not expect the increased amount to have a material impact on Kexim's external position.

Ratings are based on the bank's public policy role as Korea's (foreign currency A/stable/A-1; local-currency A+/stable/A-1) official export credit agency.

"The ratings also incorporate strong direct support from the government, including capital injections and the provision of loans," S&P credit analyst Takahira Ogawa said in a written statement.

Ratings also consider the government's legal obligation to maintain the bank's solvency, the agency said.

"Although the bank has never recorded a loss, and profit levels in the past two years have been historically high, the bank's profitability has generally been low," the analyst said. "This is because profit maximization is not Kexim's main objective, considering its mandate as a state-owned bank with a public policy role."

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