Fitch Ratings has affirmed Korea Development Bank's (KDB, 'A+'/Positive) global medium-term note (GMTN) program ratings of Long-Term 'A+' and Short-Term 'F1', which has been slightly amended and updated on 15 June 2012. Under the updated program, KDB, acting through its principal office in Korea, its London Branch, its New York Branch or any other overseas branch may issue notes. KDB's notes, under the GMTN program, will be unsecured and unsubordinated and rank pari passu with its other senior unsecured financial obligations. The bank may issue up to USD10bn or its equivalent value in other currencies at any one time. The type of currency or maturities will be determined upon agreement by KDB and investors. KDB plans to use the proceeds to repay existing debt and for general operations. The ratings of KDB's GMTN program are in line with KDB's Long- and Short-Term Issuer Default Ratings (IDR) of 'A+' and 'F1' respectively. The IDRs are equalized with South Korea's sovereign rating, reflecting KDB's de facto solvency guarantee by the government as per Article 44, KDB Act, despite proposals for the bank to be privatized. KDB is one of the key policy banks in South Korea and currently 100%-owned by the government through KDBFG. Although KDB has been slated for privatization since 2008, Fitch views that to be unlikely in the foreseeable future due to uncertain capital markets and the lack of political consensus. The bank had 69 branches with total assets of KRW131.3trn and negligible retail deposits of KRW4.9trn at end-2011.
