Moody's rates KFB Cayman Ba3

Moody's Investors Service said it assigned a Ba3 rating to KFB Cayman Holdings Co.'s proposed senior secured floating-rate notes due 2009.

The outlook is stable.

Moody's said the rating is underpinned by the company's offshore shell holding company status and structural subordination of the proposed notes, as well as the reliance on the cash upstreaming capabilities of its indirect underlying operating entity, Korea First Bank, based in Korea, for debt service.

KFB Cayman is an exempted limited liability company incorporated in Cayman Islands. It is an indirect owner, via KFB Newbridge Holdings based in Labuan, Malaysia, of a 48.56% stake in Korea First Bank. The ultimate shareholder of KFB Cayman is Newbridge Capital of the United States.

Moody's said the rating considers the historically volatile operating performance of Korea First Bank. Furthermore, given KFB Cayman's offshore domicile, the rating discounts the benefits of a government support that Korean banks generally enjoy.

Risk mitigants include the improved operating prospects for the bank as well the nominal level of dividend cushion provided by the bank's retained earnings should it encounter a difficult year.

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