Guangdong Development Bank (GDB) has launched a US$50 million three-year floating-rate certificate of deposit, reinforcing its creditworthiness after a row with Thomson BankWatch credit-rating agency. A Thomson report in April said the bank's creditworthiness was in doubt because it had delayed payment of a letter of credit. The bank denied the report and asked Thomson to 'rectify' its negative comments. BankWatch agreed to rewrite it. An official at the bank's Guangzhou head office said the dispute with the agency had not affected support for the issue. The bank had received 16 subscriptions worth more than $70 million and was forced to ask some to scale back their commitments. The official said the $5 million letter of credit that spurred the report was issued on behalf of a customer later found to be in financial trouble. The bank was seeking repayment through the courts. Regardless of the outcome, the bank would pay the letter of credit, she said. 'Given this background, there would not have been any delay in making the payment or any risk inherent in the payment, so the report was incorrect,' she said. Standard Chartered Bank, one of three arrangers for the note issue, said the April report had been referred to by participants. He declined to say whether the report had any effect on the outcome of the deal. Besides BankWatch, GDB has been rated Baa3 by Moody's Investors Service, the lowest rating within the investment-grade category of the US-based agency.
