Fitch rates Korea Development Bank

Fitch Ratings said it assigned an expected A+ rating to Korea Development Bank's proposed senior unsecured dollar-denominated global note issue. The notes will be issued under the bank's existing $4 billion U.S. shelf program.

While the issue size and tenor have yet to be determined, Fitch said it expects them to be benchmark size and for up to five and a half years. The rating is contingent upon receipt of final documents.

The expected rating is the same as the bank's long-term foreign-currency issuer default rating, which is in line with the sovereign rating of the Republic of Korea, the agency said. This reflects the Korean government's effective guarantee of the bank's solvency, Fitch said.

Fitch noted that future noteholders of the proposed issue would not be able to accelerate claims against the bank in the event of a decrease in the Korean government's direct and indirect ownership of the bank. But, the agency said it is of view that this will not affect the probability of default of the bank and be well mitigated by the additional guarantee.

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