Moody's: GS Caltex notes Baa2

Moody's Investors Service said it assigned a Baa2 rating to the proposed senior unsecured dollar-denominated notes to be issued by GS Caltex Corp.

The outlook is positive.

GS Caltex plans to use the proceeds mainly for general corporate purposes, including the repayment of outstanding borrowing, Moody's said.

The ratings reflect the company's underlying credit strength, underpinned by its strong market position as one of the major oil refiners in Korea and its diversification into the petrochemical and lubricants segments, the agency said.

These strengths are constrained by the high volatility in the company's earnings and cash flow, as a result of its high exposure to inherently cyclical market conditions, Moody's said.

The ratings also consider a two-notch uplift from its underlying credit strength, owing to parental support expected from Chevron Corp., the agency said, and government support in times of need given the Korean government's aim of ensuring stable oil supplies.

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