Moody’s could drop KDB Daewoo Securities

Moody's Investors Service said it placed KDB Daewoo Securities Co., Ltd.'s Baa2 long-term and Prime-2 short-term foreign currency issuer ratings on review for downgrade.

The review was initiated following Korea Development Bank's (KDB, Aa2 stable) Dec. 21 announcement to sell its 43% stake in KDB Daewoo Securities and 100% stake in KDB Asset Management (unrated). Subsequent to this, the Mirae Asset consortium, comprising Mirae Asset Securities (unrated) and Mirae Asset Global Investments (unrated), was selected as the preferred bidder for the combined sale.

The transaction, which is expected to be completed over the next 12 months and is subject to regulatory approval, could eventually lead to the merger of KDB Daewoo Securities with Mirae Asset Securities.

Under this scenario, Moody's said it expects the merged entity to become Korea's largest securities company by assets, representing around 17% of the securities sector's consolidated assets.

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