[ANALYST REPORT] Korea Development Bank: Capital buffers sufficient to absorb losses from exposures to shipbuilders and shippers

We expect Korea Development Bank (KDB, Aa2, stable) to report continued asset pressure from its exposures to the shipbuilding and shipping industries. However, its capital buffers are sufficient to absorb related credit costs, even under our stressed scenario.The Korean government‘s (Aa2 stable) announcements on 8 June of its Restructuring Plan for the Shipping and Shipbuilding Industries and Measures for the Recapitalization of Policy Banks do not change the fundamental credit issue facing the

June 30, 2016

[ANALYST REPORT] Construction: Government moves to stabilize presales market

WHAT’S THE STORY?2H policy includes plan to stabilize presales market: Korea’s Ministry of Strategy and Finance yesterday released its 2H economic policy, with a KRW20t financial improvement plan (including a KRW10t supplementary budget), while policies related to housing and construction comprise measures to: 1) stabilize the nation’s overheated presales market; 2) stimulate rentals via REITs; 3) expand the infrastructure for publicprivate partnerships [PPPs]; and 4) support overseas orders. We

June 30, 2016

S. Korea to become 21st member of Paris Club

[THE INVESTOR] South Korea will become a member of the Paris Club, a group of creditor countries, the Finance Ministry said on June 29. Asia’s fourth largest economy will join the club as the 21st member this week at the club’s meeting to celebrate its 60th anniversary on July 1 in Paris, according to the ministry.South Korea’s Vice Finance Minister Choi Sang-mok will attend the ceremony, it added.The Paris Club is an association of creditor countries with the major aim of finding sustainable so

June 30, 2016

JB Asset Management invests W46.5b in Hawaii hotel project

[THE INVESTOR] JB Asset Management said on June 30 that it invested 46.5 billion won (US$40 million) in a project involving the renovation of the Pacific Beach Hotel in Hawaii. Located on Waikiki beach in Honolulu, the hotel features 839 rooms with nearly 90 percent of occupancy rate over the past three years.JB Asset Management expects to gain an annual return of 7 percent from the 5-year investment. The South Korean management firm raised capital by forming a real estate fund in which a handfu

June 30, 2016

Korean gov’t to restrict overseas projects by state-run energy firms

[THE INVESTOR] The South Korean government will tightly restrict state-run energy firms’ new investment in overseas resource development in the midst of low oil prices as the government pushes for sweeping restructuring efforts, the Ministry of Trade, Industry and Energy said on June 30. The ministry will strengthen monitoring on loss-making overseas assets of public energy firms such as the Korea National Oil, the Korea Gas and the Korea Resources. “All their oversea assets will be subject to t

June 30, 2016