Fitch affirms Centercredit, Kookmin banks

Fitch Ratings said it affirmed Bank Centercredit's long-term issuer default rating at BB-, short-term issuer default rating at B, individual rating at D, support rating at 3 and support rating floor at BB-, along with its senior unsecured debt at BB-. The outlook has been changed to evolving from negative.

Fitch also affirmed Kookmin Bank's long-term issuer default rating at A+, individual rating at B, support rating at 1 and support rating floor at A, along with its senior unsecured debt at A+ and subordinated notes at A. The outlook is stable.

The affirmations are due to Kookmin Bank proposed acquisition of a 30% stake in Bank Centercredit for $634 million. Kookmin said it intends to increase this stake to 50.1% within 30 months.

The change in Bank Centercredit's outlook reflects the stronger ability of Kookmin to provide support in case of need, Fitch said. The agency said it does not expect to upgrade Bank Centercredit upon completion of the deal given the considerable uncertainty over Kookmin's support of a foreign bank.

However, there would likely be significant upside for Bank Centercredit if and when Kookmin consolidates a majority stake, Fitch said.

The affirmation of Kookmin's ratings reflects the fact that the acquisition size is relatively small, since the initial investment is equivalent to only 3.9% of its equity at the end of 2007, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.