Moody's rates GS Engineering Baa1

Moody's Investors Service said it assigned an issuer rating of Baa1 to GS Engineering and Construction.

The outlook is stable.

"GS E&C's core credit strength is its track record of operational and financial stability, even though it operates in the cyclical construction industry," Ken Chan, a Moody's analyst, said in a written statement. "This can be attributed to its diversified business portfolio, its established positions in various key business divisions, and also to its conservative approach to financial management."

"Moreover, the company's healthy order backlog, momentum in new orders and support from its affiliates suggest higher cash flow visibility, while the rating is further supported by its strong balance sheet liquidity," Chan said.

The rating also reflects the lumpiness of construction contract awards, the company's increasing exposure to the cyclical Korean housing market and its large off-balance sheet contingent liabilities, the agency said.

The issuer's adjusted debt-to-EBITDA ratio is expected to be between 2.5 and 3 times for the next two to three years, Moody's said.

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