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Kommunalkredit Austria AG

EANS-Adhoc: Kommunalkredit Austria AG
Kommunalkredit withdraws Moody's Ratings for unsecured funding instruments

--------------------------------------------------------------------------------
  correction to an ad-hoc disclosure transmitted by euro adhoc with the aim of
  a Europe-wide distribution. The issuer is solely responsible for the content
  of this announcement.
--------------------------------------------------------------------------------
other/rating
20.06.2014


(Vienna, 20 June 2014) - Kommunalkredit Austria AG (KA) decided today to
withdraw all ratings for unsecured funding instruments (bank deposit, bank
financial strength rating, senior unsecured, subordinate, other short term) by
Moody's Investors Service (Moody's) with immediate effect, except for its
current covered bond rating of Aa2. 

The decision is due to differences in opinion between the bank and Moody's
regarding the - according to Moody's - reduced support propensity by the
Republic of Austria (Moody's rating Aa1) for KA, which is holding a 99.78% share
in KA.

Moody's argues that the draft legislation regarding Hypo Alpe Adria, which was
approved by the Council of Ministers on 11 June 2014, implies a reduced support
propensity by the Republic of Austria for the Austrian banking sector in
general, which is now to be applied to KA in particular.

Prior to the withdrawal, the bank had the following Moody's ratings for
unsecured instruments: bank deposit "Baa3", bank financial strength rating "E",
senior unsecured "Baa3", subordinate "Ca", other short term "P-3". The bank
deposit, senior unsecured and other short term ratings carried a negative
outlook.

In the view of KA and the Republic of Austria the above mentioned draft
legislation, which is still subject to the parliamentary legislative process of
the Republic of Austria, does not indicate a change in the support propensity of
the Republic of Austria. This was also communicated to the rating agency. Since
its restructuring in 2009, KA has received neither capital nor liquidity support
and at the current time no support requirement is foreseeable. Nevertheless, in
accordance with the amending decision by the European Commission (EC) of 19 July
2013, the Republic of Austria has the possibility to provide respective support
measures to KA.  

In 2013, KA reported an annual IFRS result of EUR 20.4mn before taxes (EUR 5.1mn
after taxes). For the first half 2014, KA expects a positive result. KA has a
sound credit portfolio of which 93.1% is rated investment grade and which shows
no overdue credit claims (non-performing-loan ratio of 0.0%). The capitalization
under Basel III is solid with a total capital ratio of 22.9 % and a common
equity tier 1 ratio of 16.1% as of 30 April 2014.


ISIN:

XS0285503248
XS0340901908
XS0271821513
CH0025662831
CH0024015452
XS0218834843
XS0214564972
XS0210167218
XS0100920353
XS0252707624
XS0270872640
XS0253410236
XS0236776877
XS0218474533
XS0213230047
XS0205974701
XS0180539420
XS0495988072
AT0000329859
XS0302365134
XS0267998481
XS0252786669
XS0235597068
XS0215839019
CH0020669583
XS0197387953
XS0299062389
XS0261832942
XS0252593198
CH0022280058
XS0215865287
XS0212122534
XS0187975262
XS0163624504
XS0592235187
XS0373257590
XS0255439803
XS0241451581
XS0219327524
XS0214981812
XS0211496590
XS0186736228
XS0104786263
XS0687890441
XS0973424152
XS0981809584
XS1003074306
XS1003354252
XS1005197477
XS1008699933
XS1013581274
XS1015492595
XS1016032457
XS1017111029
XS1017193167
XS1018909454
XS1020014608
XS1033673440
XS1040273267
XS1045121784
XS1045221063
XS1046170699
XS1048251091
XS1055031139
XS1072804484
XS1073920255


Stock exchange:
Vienna, Luxembourg, Zurich


original announcement:
--------------------------------------------------------------------------------
EANS-Adhoc: Kommunalkredit Austria AG / Kommunalkredit withdraws Moody's Ratings
for unsecured funding instruments

other/rating
20.06.2014


(Vienna, 20 June 2014) - Kommunalkredit Austria AG (KA) decided today to
withdraw all ratings for unsecured funding instruments (bank deposit, bank
financial strength rating, senior unsecured, subordinate, other short term) by
Moody's Investors Service (Moody's) with immediate effect, except for its
current covered bond rating of Aa2. 

The decision is due to differences in opinion between the bank and Moody's
regarding the - according to Moody's - reduced support propensity by the
Republic of Austria (Moody's rating Aa1) for KA, which is holding a 99.78% share
in KA.

Moody's argues that the draft legislation regarding Hypo Alpe Adria, which was
approved by the Council of Ministers on 11 June 2014, implies a reduced support
propensity by the Republic of Austria for the Austrian banking sector in
general, which is now to be applied to KA in particular.

Prior to the withdrawal, the bank had the following Moody's ratings for
unsecured instruments: bank deposit "Baa3", bank financial strength rating "E",
senior unsecured "Baa3", subordinate "Ca", other short term "P-3". The bank
deposit, senior unsecured and other short term ratings carried a negative
outlook.

In the view of KA and the Republic of Austria the above mentioned draft
legislation, which is still subject to the parliamentary legislative process of
the Republic of Austria, does not indicate a change in the support propensity of
the Republic of Austria. This was also communicated to the rating agency. Since
its restructuring in 2009, KA has received neither capital nor liquidity support
and at the current time no support requirement is foreseeable. Nevertheless, in
accordance with the amending decision by the European Commission (EC) of 19 July
2013, the Republic of Austria has the possibility to provide respective support
measures to KA.  

In 2013, KA reported an annual IFRS result of EUR 20.4mn before taxes (EUR 5.1mn
after taxes). For the first half 2014, KA expects a positive result. KA has a
sound credit portfolio of which 93.1% is rated investment grade and which shows
no overdue credit claims (non-performing-loan ratio of 0.0%). The capitalization
under Basel III is solid with a total capital ratio of 22.9 % and a common
equity tier 1 ratio of 16.1% as of 30 April 2014.


ISIN:

XS0285503248
XS0340901908
XS0271821513
CH0025662831
CH0024015452
XS0218834843
XS0214564972
XS0210167218
XS0100920353
XS0252707624
XS0270872640
XS0253410236
XS0236776877
XS0218474533
XS0213230047
XS0205974701
XS0180539420
XS0495988072
AT0000329859
XS0302365134
XS0267998481
XS0252786669
XS0235597068
XS0215839019
CH0020669583
XS0197387953
XS0299062389
XS0261832942
XS0252593198
CH0022280058
XS0215865287
XS0212122534
XS0187975262
XS0163624504
XS0592235187
XS0373257590
XS0255439803
XS0241451581
XS0219327524
XS0214981812
XS0211496590
XS0186736228
XS0104786263
XS0687890441
XS0973424152
XS0981809584
XS1003074306
XS1003354252
XS1005197477
XS1008699933
XS1013581274
XS1015492595
XS1016032457
XS1017111029
XS1017193167
XS1018909454
XS1020014608
XS1033673440
XS1040273267
XS1045121784
XS1045221063
XS1046170699
XS1048251091
XS1055031139
XS1072804484
XS1073920255


Stock exchange:
Vienna, Luxembourg, Zurich



Further inquiry note:
Kommunalkredit Austria AG
Treasury - Investor Relations 
Dinah Reiss
1092 Wien/Vienna, Türkenstraße/Tuerkenstrasse 9
Tel./Phone: +43/1/31 6 31-678
Fax: +43/1/31 6 31-505 oder/or 99678
Mail:  d.reiss@kommunalkredit.at


end of original announcement                euro adhoc
--------------------------------------------------------------------------------

sector publicity of original announcement: 
2014-06-20 17:46:14 - Bloomberg- sent

2014-06-20 17:46:14 - Bloomberg- sent



Further inquiry note:
Kommunalkredit Austria AG
Treasury - Investor Relations 
Dinah Reiss
1092 Wien/Vienna, Türkenstraße/Tuerkenstrasse 9
Tel./Phone: +43/1/31 6 31-678
Fax: +43/1/31 6 31-505 oder/or 99678
Mail:  d.reiss@kommunalkredit.at

end of announcement                               euro adhoc 
--------------------------------------------------------------------------------


issuer:      Kommunalkredit Austria AG
             Türkenstraße  9
             A-1092 Wien
phone:       +43 1 31 6 31
FAX:         +43 1 31 6 31 105
mail:         kommunal@kommunalkredit.at
WWW:      www.kommunalkredit.at
sector:      Banking
ISIN:        -
indexes:     
stockmarkets: stock market: Wien 
language:   English

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