Fitch rates KDB bonds A

Fitch Ratings said it assigned the Korea Development Bank's planned issue of senior unsecured bonds an expected rating of A. The issue size is expected to be about $1 billion or its equivalent.

Korea Development Bank's long-term A rating is in line with that of the Republic of Korea, reflecting the bank's quasi-sovereign status. The government of Korea is obliged under the KDB Act to maintain the bank's solvency and is in Fitch's view strongly committed to ensuring that the bank is able to meet its obligations in a timely manner.

Such strong support from the Korean government was evident in April 2004, as authorities injected KRW1 trillion of new capital in the form of KRW700 billion of Kepco shares and KRW300 billion of shares in Korea Water Resource Corp into KDB. As a result, KDB's CAR is estimated to have improved to 18% at end-April 2004 from 16.22% in December 2003.

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