Export-Import Bank of Korea's HK$400 Mil. 1.25% Euro Medium-Term Notes Rated 'A-'
SINGAPORE (Standard & Poor's) Nov. 26, 2003--Standard & Poor's Ratings Services today assigned its 'A-' senior unsecured foreign currency debt rating to the Export-Import Bank of Korea's (KEXIM; foreign currency A-/Stable/A-2; local currency --/--/A-1) HK$400 million 1.25% Euro Medium-Term Notes due Dec. 2, 2004. The notes will be drawn down from KEXIM's US$4 billion Euro Medium-Term Notes Program, also rated 'A-'. Standard & Poor's issuer credit ratings on KEXIM are based on its public policy role as Korea's official export credit agency, providing financial facilities in support of the Korean government's (foreign currency rating A-/Stable/A-2; local currency rating A+/Stable/A-1) export-led growth strategy, and foreign trade and investment policies. The bank is owned and controlled by the government. The ratings also incorporate the strong direct support from the Korean government, including capital injections and provision of loans. Since 1998, Kexim has enjoyed repeated capital injections, totaling close to Korean won (W) 1.9 trillion (US$1.6 billion), from the government. The ratings also take into account the government's legal obligation to maintain the bank's solvency. Standard & Poor's, however, views this statutory obligation as only a sign of the government's commitment to support KEXIM, rather than a guarantee of timely payment for all of the bank's obligations. "Taking into account the bank's robust public policy role and the strong support from the Korean government, Standard & Poor's equalizes its ratings on KEXIM with those on the sovereign," said Standard & Poor's credit analyst Chih Wai Liew, in the Asia-Pacific Sovereign Ratings Group. Standard & Poor's expects KEXIM's public policy role to remain intact in the near-to-medium term, as the Korean government is expected to remain engaged in active economic management. Thus far, the government has also not shown any intention to privatize the bank. Nevertheless, KEXIM's public policy role could diminish in the longer term if the government were to embrace a more far-reaching, laissez faire attitude toward economic development. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Credit Ratings Actions.
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