Moody's rates Korea Development bank bonds Aa3

Moody's Investors Service said it assigned Aa3 ratings to both the Korea Development Bank's Japanese yen bonds 28 series due in August 2010 and Japanese yen floating-rate bonds second series due in August 2010.

The outlook is negative.

The ratings are contingent upon receipt of final documents.

The ratings reflect the bank's special status as Korea's primary developmental finance institution, Moody's said. It also plays a critical role in the country's reform efforts as it provides funds to restructuring corporates with liquidity needs. Its policy function ensures strong government support, the agency said.

The negative outlook reflects Moody's concerns that the bank's proposed privatization could significantly reduce the key support factors.

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