Fitch rates Korea Development Bank notes AA-

Fitch Ratings said it assigned an expected AA- rating to Korea Development Bank’s proposed dollar-denominated senior unsecured notes.

While the size of the issue has yet to be determined, Fitch said it expects the tenor of the notes to be five years.

These are subject to change depending on market conditions, the agency said.

The proceeds will be used for general operations, including extending foreign-currency loans and repaying maturing debt and other obligations, Fitch said.

The notes are rated at the same level as the bank’s long-term foreign-currency issuer default rating as they will constitute direct, unconditional, unsecured and unsubordinated obligations of the bank, the agency said.

The bank’s ratings are equalized with South Korea’s rating to reflect the bank’s policy role in the system and the government’s de-facto solvency guarantee and commitment to hold a controlling stake in Korea Development Bank, Fitch said.

The ratings on the bank would be directly affected by changes to South Korea’s ratings or to its relationship with the government, but no significant changes to either is expected, the agency said.

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