The nascent Korean credit-rating industry and asset-backed market has just received a boost, as the country's Finance Supervisory Service (FSS) recently provided Seoul Credit Information (SCI), the largest of the four rating agencies in Korea, with the ability to rate asset-backed transactions and short-term corporate bonds. The company is also said to be actively seeking a foreign partner in the U.S. to help expand its business.
With the newfound ability to provide ratings on bonds issued without guarantees, including high-yield and subordinated bonds, SCI will now step farther ahead of its competition - Korea Credit Information, Korea Credit Evaluation and Korea Management Consulting and Credit Rating Corp. The company was also listed on the Kosdaq for the first time this year and the combined will allow the company to expand its business.
"There is a demand in Korea for credit rating services, especially for emerging products such as the structured finance sector," said S.Y. Kim, an executive director at SCI. "I expect the credit rating industry to grow significantly."
Although SCI is the youngest company of its sort in Korea, it claims to be the most aggressive. Sources at the company say an effective credit scoring system needs to be established and partnering with a U.S. firm would help SCI to improve business.
"In Korea, most of the credit rating agencies are teamed up," Kim said. "We would welcome a foreign company, especially for our credit data reporting business."
Rumors on the Street have been that SCI was courting Standard & Poors Ratings Services recently for a partnership, but an S&P spokeswoman said that she was not aware of any intention on the part of S&P to form such an association.