Bond Rating

Introduction

Issue-specific credit ratings are assigned to corporate bonds that corporations issue to raise long-term financing for more than a year by credit rating agencies.

Issue-specific credit ratings are NICE’s opinion of the general creditworthiness of a bond or financial obligation. This opinion is based on our analysis on the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the financial obligation.

Arirang Bond

An Arirang bond is a won-denominated bond issued by non-residents in the local capital market just as Yankee bond, Samurai bond, and Bulldog bond are issued in respective local currencies by non-residents and traded in respective local capital markets. For example, won-denominated bond issued by Korean companies’ overseas subsidiaries in the Korean capital market is an Arirang bond. The Asian Development Bank (ADB) first issued Arirang bond is 1995 with Korea Development Bank as the agent. Pursuant to the Foreign Exchange Market Liberalization Act of 1999, the Korean government permitted non-resident companies to issue Arirang bonds.

The evaluation of won-denominated bonds (Arirang bonds) aims to provide appropriate credit ratings for disciplined issuance and trade of the bond through analyzing credit risk of the guarantor, and business and financial risk of the issuer.