Alphabiz - Moody’s Downgrades Korea Investment & Securities’ Credit Rating to Baa3

[Alpha Biz= Paul Lee] Seoul, September 24, 2025 – Global credit rating agency Moody’s Investors Service has downgraded the long-term foreign-currency issuer rating and senior unsecured bond rating of Korea Investment & Securities (KIS) from Baa2 to Baa3, citing a weakening funding structure and an increasingly high-risk business model.



The downgrade comes as KIS awaits regulatory approval to operate as an Integrated Investment Account (IMA) provider, a license application currently under review by Korea’s financial authorities.



Reasons for the Downgrade

In its latest report, Moody’s noted:

Shift toward higher risk-return business model: The firm’s risk appetite exceeds that of domestic peers, with a risk appetite ratio of 24.5% as of June 30, compared with the industry average of 20%.



Heavy reliance on short-term debt issuance: KIS’s outstanding commercial paper (발행어음) reached KRW 180 trillion (approx. 174% of equity capital) as of June 30. While the notes mature in under a year, much of the funding is allocated to long-term corporate finance and venture capital assets, creating asset-liability mismatches.



Outlook Revised to Stable

Despite the downgrade, Moody’s revised KIS’s outlook from Negative to Stable, signaling expectations of more stable performance ahead.

Moody’s added that an upgrade could be supported by:

Improved liquidity and funding structure



Reduced risk appetite

More balanced asset-liability management

The decision underscores concerns over the sustainability of Korea’s leading investment firms’ funding practices amid growing exposure to high-risk assets.

Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)