Moody's rates Korea Exchange Bank notes Baa2

Moody's Investors Service said it assigned a Baa2 (hyb) rating to Korea Exchange Bank's proposed dollar-denominated benchmark Basel III subordinated bond issue. The bank has an A1 rating and a stable outlook.

The agency noted that the terms and conditions of the bank's debt instrument program have been revised to incorporate Basel III-compliant non-viability language. This revision allows future subordinated debt drawdowns to be considered as tier 2 capital. Under the program's terms, the principal on these notes would be fully written down in the event that the bank is designated as an "insolvent financial institution," Moody’s said.

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