Korea-based Suhyup Bank is scheduled to spin off from NFFC and launch as a separate entity on Dec. 1, 2016. We see at least a one-in-two chance that the bank will significantly improve its capitalization after receiving a planned KRW900 billion capital injection from NFFC and not become jointly and severally liable for NFFC's existing debt. We are placing our 'A-/A-2' ratings on Suhyup Bank on CreditWatch with positive implications. We plan to resolve the CreditWatch status within 45 days. We will raise the ratings on the bank by one notch if we believe the bank's capitalization is significantly strengthened as planned; potential risks related to the joint and several liability dissipate; and the bank's risk appetite remains manageable and
