Standard & Poor's Ratings Services said Saturday that it continues placing Hana Bank on its "negative watch" list as the lender is getting closer to
complete the acquiring of Korea Exchange Bank.
Hana Financial clinched a deal last November with U.S. buyout fund Lone Star Funds to buy South Korea's fifth-largest lender for 4.69 trillion won ($4.19 billion), which it said would be paid with internal funds and the proceeds from new share and bond sales.
The international credit agency gave the lender a negative status following the announcement, which has long- and short-term bond credit ratings of "A" and "A-2," respectively. S&P said there is a risk the company's financial health may be adversely affected due to the move to buy KEB from U.S.-based Lone Star Funds.
"The 'CreditWatch' negative status continues to reflect our assessment that there is at least a 50 percent chance of Hana being downgraded primarily due to the immediate financial impact on Hana (Bank) and the parent company, Hana Financial Group Inc., from funding the KEB acquisition," S&P said in a statement.
The rating agency added, however, that it intends to review Hana Financial Group's capitalization levels after the completion of the transaction in addition to reviewing KEB's financial profile.
"We believe that we lack a firm grasp of the resulting financial profiles of Hana and Hana Financial Group after the completion of the transaction. We will resolve the CreditWatch action as soon as we gain sufficient clarity on some or all of the aforementioned factors," S&P said.
Hana Financial said Monday that it has raised 1.46 trillion won -- about 25 percent of the money needed to buy KEB -- in share offering by selling 34.1 million common shares to 36 domestic and foreign investors at 42,800 won each.
The group's deal to buy KEB will enable Hana Financial Group to become the country's No. 2 industry player with assets worth 316 trillion won. The contract is subject to regulatory approval.