S&P rates Kookmin Bank notes BBB+

S&P said it assigned a BBB+ program rating to the subordinated tranche proposed by Kookmin Bank under the bank's $8 billion global medium-term note program.

The agency also said it assigned a BBB+ long-term issue rating to Kookmin Bank's proposed dollar-denominated Basel III tier-2 sustainability subordinated notes.

The proceeds will be used by the bank to provide loans compliant with its sustainable financing framework, S&P explained.

The notes will be direct, unsecured and subordinated to senior creditors' claims, the agency noted.

They will be classified as Basel III tier 2 regulatory capital, S&P said.

The issue rating is one notch lower than the bank's A- stand-alone credit profile, reflecting the risk related to subordination, the agency said.

It does not reflect the risk of write-down and waiver of principal and interest payments upon the occurrence of a non-viability event, the agency said.

S&P said it believes non-viability would likely be triggered only if the issuer falls into a negative net-worth position.

Korean banks, including Kookmin Bank, will likely receive extraordinary support from the government in a pre-emptive manner and at a relatively early stage if they were to come under financial stress, the agency said.

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