Fitch: Korea Finance notes AA-

Fitch Ratings said it assigned an expected AA- rating to Korea Finance Corp.'s proposed long-term senior unsecured dollar-denominated notes.

The notes will be issued under the bank's existing $5 billion shelf program. The proposed tenor is five years, but the issue size has yet to be determined.

The proceeds will be used for the company's general operations, including extending foreign-currency loans.

The bonds are rated at the same level as Korea Finance's long-term issuer default rating of AA-, which in equalized with the issuer default rating of South Korea.

The rating reflects a belief of an extremely high probability of support, if needed, from the government for Korea Finance, Fitch said.

This is because the Korean government is legally obliged to cover Korea Finance's losses should the latter's capital reserve funds fail to do so, the agency said.

Korea Finance's ratings are not likely to be affected by the government's plan to reorganize policy financial institutions, including Korea Finance, which will be announced in late August.

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