Moreover, the rating itself is more important than the reasons for it.

for bonds of corporate issuers with a credit rating of not less than "AA-" or its equivalent, EUR 25 million per issuer;

for bonds of corporate issuers with a credit rating of not less than "AAA" or its equivalent, EUR 50 million per issuer;

The ratings referred to in these guidelines shall be those applied by at least one of the major international credit rating agencies, as generally understood.

for holdings of collective investment funds with a credit rating of not less than "AA-" or its equivalent, EUR 25 million for each such vehicle.

reserves needed to provide an assurance to the creditors of the ECSC that all of its outstanding borrowings and the interest thereon will be paid in full on their due date, thus enabling the obligor to maintain its "AAA" rating or its equivalent;

for bonds issued or guaranteed by other sovereign or supranational borrowers, with a credit rating of not less than "AA-" or its equivalent, EUR 100 million per issuer or guarantor;

The deteriorating situation of Hynix in 2001 was also reflected in its credit rating.

It is not reasonable to insist that a firm's credit rating is not the determining factor for potential investors.

The credit rating given by NACF to Hynix at the time of the measures, namely 8 ( fn ), did not justify granting further financing to Hynix.

In addition, following the logic argued by Hynix, the rating of Hynix should have been raised after the October 2001 restructuring measures were carried out.

The second point to examine would be the history of the company in servicing its existing debts and the rating given to it by the lenders concerned.

Hynix's credit rating in October 2001 was `selective default` , it had a history of not having serviced its debt during 2001 and its liabilities exceeded six times its equity.

Hynix and the GOK argued that Hynix's credit rating of `selective default` was only a consequence of the restructuring programme and should not have been taken into account by the banks.

The first point to examine when assessing the calculation of the subsidy in cases of provision of financing to a company in difficulty is the credit rating of the company at the time of the measures.

The internal ratings of the banks concerned reflected this assessment.

Any potential investor planning to invest in a company examines its rating.

The CBO programme was created in order to increase the bond financing going to relatively small firms with lower credit ratings.

It is noted that the speculative rating B given to Hynix by the international rating agency Standard and Poor's in January 2001 does not support such a possibility either. (53)

They argued that their participation in the October 2001 package was determined on the basis of their credit evaluation of Hynix, supported by analysis from outside consultants.

It is also noted that the position of the decision of these banks to participate in the measures is not consistent with their own evaluation of the financial situation of Hynix, and in particular with the credit rating they gave it.

However, in both these months Hynix bonds were financed by KDB regardless of the deteriorating situation of the company reflected in the decrease of its rating.

The Korean bond market applied extremely strict conditions in 2001 and companies with moderate credit ratings were not able to refinance their bonds in the market.

As explained already above in the context of the assessment of the three previous investigated measures, Hynix had exhausted its possibilities of receiving bank loans as early as January 2001 due to its high exposure to its major creditor banks and its weak credit rating.

Clearly the rating agencies considered the whole situation of Hynix and investors operating under market conditions would have, and should have, taken into account the credit rating that applied to Hynix at the time of the October 2001 measures.

Other companies, for example subsidiaries of the Hanwha and Hanjin group and Dongkuk Steel, were in a similar situation to Hynix as regards credit ratings (BBB) and the number of bonds maturing at the same time, but they were not selected for the programme.

Refinancing of the bonds in the bond market was not possible due to its weak credit rating which did not allow the market to accept its maturing bonds, as admitted by the GOK in its questionnaire response.

In the assessment of the credit standard of debt instruments, the ECB takes into account, inter alia, available ratings by market agencies, as well as certain institutional criteria which would ensure particularly high protection of the holders(39),

On the other hand, the inspection of rating agencies with respect to the rating of securities issued by banks and financial companies is the responsibility of the Superintendencia de Bancos e Instituciones Financieras, SBIF (Superintendency of Banks and Financial Institutions).

At the beginning of January 2001 the rating of Hynix was investment grade BBB- according to the Korean rating agencies and a speculative grade B by Standard and Poor's. The Korean agencies downgraded Hynix to speculative BB+ grade on 22 January 2001. The Standard and Poor's rating was downgraded to B- in March 2001, CCC+ in August 2001 and `selective default` (`SD` ) in October 2001. (23)

The GOK also stated in its questionnaire reply that the very reason for setting up the KDB Programme was to help some companies with moderate credit ratings to refinance their maturing bonds, since this would not have been possible for them in the market.

Hynix was not able to finance its maturing bonds through bank loans, since it had exhausted its possibilities for receiving bank loans and refinancing of the bonds in the bond market was not possible due to its weak credit rating.

Publicly offered securities risk rating services are provided by rating agencies constituted for the sole purpose of rating publicly offered securities, and they must be enrolled in the Registro de Entidades Clasificadoras de Riesgo (Register of Risk Rating Agencies) maintained by the SVS.

The rating is indicative of the financial situation of the company and its ability to attract investments or receive financing at the given time since the potential investors/lenders base their decisions above all on the rating given to the company by an independent international rating agency.

If a company with even a moderate rating continued to service its existing debt to some of its lenders, it would not be completely unreasonable for these lenders to take this into account in their internal rating of the company concerned and also consider this fact positively when assessing whether further lending to the company concerned could be considered.

The credit rating given by NACF to Hynix at the time of the measures, namely 8(56), did not justify granting further financing to Hynix.

Hynix's credit rating in October 2001 was "selective default", it had a history of not having serviced its debt during 2001 and its liabilities exceeded six times its equity.

Hynix and the GOK argued that Hynix's credit rating of "selective default" was only a consequence of the restructuring programme and should not have been taken into account by the banks.

for bonds of corporate issuers with a credit rating of not less than "AA" or its equivalent, EUR 25 million per issuer;

for bonds of corporate issuers with a credit rating of not less than "AAA" or its equivalent, EUR 50 million per issuer;

for holdings of collective investment funds with a credit rating of not less than "AA" or its equivalent, EUR 25 million for each such vehicle.

for bonds of corporate issuers with a credit rating of not less than "AA-" or its equivalent, EUR 25 million per issuer;

It is noted that the speculative rating B given to Hynix by the international rating agency Standard and Poor's in January 2001 does not support such a possibility either.

for holdings of collective investment funds with a credit rating of not less than "AA-" or its equivalent, EUR 25 million for each such vehicle.

The ratings referred to in these guidelines shall be those applied by at least one of the major international credit rating agencies, as generally understood.

for bonds issued or guaranteed by other sovereign or supranational borrowers, with a credit rating of not less than "AA" or its equivalent, EUR 100 million per issuer or guarantor;

At the beginning of January 2001 the rating of Hynix was investment grade BBB- according to the Korean rating agencies and a speculative grade B by Standard and Poor's. The Korean agencies downgraded Hynix to speculative BB+ grade on 22 January 2001.

However, credit rating agencies should consider adopting internal policies and procedures designed to ensure that credit ratings published by them are fairly presented and that they appropriately disclose any significant interests or conflicts of interest concerning the financial instruments or the issuers to which their credit ratings relate.

for bonds issued or guaranteed by other sovereign or supranational borrowers, with a credit rating of not less than "AA-" or its equivalent, EUR 100 million per issuer or guarantor;

reserves needed to provide an assurance to the creditors of the ECSC that all of its outstanding borrowings and the interest thereon will be paid in full on their due date, thus enabling the obligor to maintain its "AAA" rating or its equivalent;