Fitch may cut National Agriculture Cooperative

Fitch Ratings said it placed National Agricultural Cooperative Federation's A+ long-term foreign-currency issuer default rating and A+ senior debt on Rating Watch negative.

The negative watch is driven by a view that future changes within the company may create more uncertainty about whether or not the South Korean government's propensity to support it would change, Fitch said.

Fitch noted that lack of government ownership and the solvency guarantee in the Agricultural Cooperative Law remain relative weaknesses compared to the major policy banks, particularly with regard to potential timeliness of support.

But the agency said it believes that the probability of support, if required, from the government would be extremely high given the company's crucial policy roles for Korea's agricultural sector, as well as its systemic importance as one of the major nationwide banks.

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