Fitch rates Kogas notes AA-

Fitch Ratings said it assigned an expected rating of AA- to Korea Gas Corp.'s (Kogas) proposed dollar-denominated senior unsecured notes.

The notes will be issued under the company's global medium-term note program, which also is rated at AA-.

The company also increased the size of the program to $11 billion from $8 billion. The rating on the program is unchanged, Fitch said.

The proceeds will be used by the company to refinance existing debt and for general corporate purposes, the agency said.

The notes are rated at the same level as the company’s senior unsecured rating as they represent direct, unconditional, unsecured and unsubordinated obligations, Fitch said.

The ratings are equalized with that of Korea due to their strong strategic and operational ties, the agency explained.

The ratings also reflect the company’s status as an important state-owned enterprise in the country with a dominant position in the natural-gas business through its monopoly in the wholesale gas segment and its ownership of Korea's entire gas transmission infrastructure, Fitch said.

The agency said it expects Kogas to post a slight improvement in operating profit in 2016.

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