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

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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.
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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