Bangkok--20 Jun--Standard & Poor's 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-1, local currency --/--/A-1) ?35 billion 1.84% Series 5 Samurai Bond due June 26, 2012. Standard & Poor's issuer credit ratings on Kexim are based on its public-policy role as the country's official export credit agency. Kexim provides financial facilities in support of the Korean government's (foreign currency A/Stable/A-1, local currency 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 strong direct support from the government, including capital injections and the provision of loans," said Standard & Poor's credit analyst Takahira Ogawa. Since 1998, Kexim has enjoyed repeated capital injections, totaling Korean won (KRW) 2.7 trillion (US$2.9 billion), from the government. The ratings also take into account the government's legal obligation to maintain the bank's solvency. However, Standard & Poor's views this statutory obligation only as a sign of the government's commitment to support Kexim, rather than a guarantee of timely payment of all the bank's obligations. Nevertheless, Standard & Poor's equalizes its ratings on Kexim with those on the sovereign due to the bank's robust public-policy role and the strong governmental support. "On the other hand, the ratings on Kexim are constrained by its low profitability, although the bank has never recorded a loss," added Mr. Ogawa. As a state-owned bank with a public-policy mandate, profit maximization is not Kexim's main objective and its net interest margin has historically been low. Kexim's overall profitability improved by 224% in 2005 from 2004, due mainly to a KRW261 billion gain from the disposal of Industrial Bank of Korea's (IBK) shares, equivalent to 7.9% of IBK's paid-up capital and KRW63 billion in net trading gains. However, the bank's ratio of net interest income to average earning assets further declined in 2005 to 0.73%, from 0.78% in 2004 and 1.37% in 2002. Given the likelihood of relatively stable interest rates in the near future, Kexim's interest margin is expected to remain low in 2007. A Korean-language version of this media release is available via standardandpoors.co.kr or via Standard & Poor's CreditWire Korea on Bloomberg Professional at SPCK . Complete ratings information is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, 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 Find a Rating, then Credit Ratings Search. Media Contact: David Wargin, New York, NY (212) 438-1579 [email protected] Analyst Contacts: Takahira Ogawa, Singapore (65) 6239-6342 JaeMin Kwon, CFA, Tokyo (81) 3-4550-8549