OREANDA-NEWS. Fitch Ratings has assigned Doosan Power Systems S.A. (DPS)'s proposed US dollar guaranteed senior capital securities an expected rating of 'AA-(EXP)'.

The rating reflects the credit enhancement provided to investors by the guarantee from The Export-Import Bank of Korea (KEXIM; AA-/Stable). The final rating is contingent upon the receipt of final documentation and legal opinions conforming to information already received.


KEXIM as Guarantor: The rating reflects the unconditional and irrevocable guarantee from KEXIM. The note is rated at the same level as KEXIM's Long-Term Issuer Default Rating as its guarantee makes the notes the bank's direct, general, unsubordinated and unconditional obligations, and they will rank pari passu with all other present and future unsecured and unsubordinated obligations of KEXIM.

Effective Maturity Date: Fitch views the notes' first call date as the effective maturity date.
According to the terms of the notes, unless the notes have been fully redeemed before the first call date in 2018, KEXIM will be obliged to purchase the notes in full on the first call date. KEXIM will also be obliged to purchase the notes in full if DPS goes into bankruptcy before the first call date.

DPS's Credit Not Considered: DPS's standalone credit strength is not a consideration in the instrument rating as KEXIM as the guarantor will purchase the bond in full if DPS is declared bankrupt.

Since the rating on the credit-enhanced bonds is based solely on KEXIM's guarantee, any change in Fitch's assessment of KEXIM's ratings will result in an equivalent change in the rating of this bond.

For the ratings of KEXIM, the following sensitivities were outlined by Fitch in its Credit Update Report dated 22 September 2015:
- Any change to South Korea's ratings (AA-/Stable) will affect KEXIM's ratings directly. A significant change in KEXIM's relationship with the government may trigger a ratings review. Fitch does not expect either in the near future.