Research Update: Mirae Asset Daewoo Outlook Revised To Negative On Narrowing Capital Buffers; 'BBB/A-2' Ratings Affirmed

We expect the capital buffer of Mirae Asset Daewoo Co. Ltd. (MAD) to narrow mainly due to a potential increase in equity investments, higher market risks, and lower profits. MAD's overall risk management could also be undermined by the weakening credit quality of its corporate lending and investment assets. We are revising the outlook on MAD to negative from stable. We are affirming our 'BBB' long-term and 'A-2' short-term issuer credit ratings on Korea's largest securities company in terms of assets, and the 'BBB' long-term issue rating on MAD's senior unsecured notes. The negative outlook reflects our view that we could downgrade MAD if the company's capitalization deteriorates such that its risk-adjusted capital (RAC) ratio declines below 7%, the credit

...- We expect the capital buffer of Mirae Asset Daewoo Co. Ltd. (MAD) to narrow mainly due to a potential increase in equity investments, higher market risks, and lower profits. - MAD's overall risk management could also be undermined by the weakening credit quality of its corporate lending and investment assets. - We are revising the outlook on MAD to negative from stable. We are affirming our '###' long-term and 'A-2' short-term issuer credit ratings on Korea's largest securities company in terms of assets, and the '###' long-term issue rating on MAD's senior unsecured notes. - The negative outlook reflects our view that we could downgrade MAD if the company's capitalization deteriorates such that its risk-adjusted capital (RAC) ratio declines below 7%, the credit quality of corporate loans and overseas investments deteriorates significantly, or if its funding and liquidity profiles materially weaken over the next 12-24 months....

Research Update