...Two-Notch Downgrade Buffer: The `AAA' covered bond rating is based on Kookmin Bank's Long-Term Issuer Default Rating (IDR) of `A', an IDR uplift of zero notches, the various uplifts above the IDR granted to the programme and the overcollateralisation (OC) protection provided by the programme's asset percentage (AP). The covered bonds are rated five notches above the bank's IDR. This is out of maximum achievable seven notches, consisting of an IDR uplift of zero notches, a payment continuity uplift (PCU) of six notches and a recovery uplift of one notch. Zero IDR Uplift: The IDR uplift is at zero notches. Korea's banking regulations allow the resolution of an authorised bank as part of the Financial Services Commission's supervisory powers, but the power to bail-in creditors has not yet been explicitly contemplated under the framework. This means should the bank be resolved, it may result in the direct enforcement of recourse against the cover pool for the payment of the outstanding covered...
