Moody's cuts GS Engineering to Baa3

Moody's Investors Service said it downgraded GS Engineering & Construction Co. Ltd.'s issuer rating to Baa3 from Baa2. This concludes a downgrade review that began in Dec..

The outlook is negative.

The downgrade has been driven by the significant challenges that the company faces in the near term, given the weakening in its financial profile because of the persistent downturn in the Korean residential construction industry, Moody's said.

The company's financial leverage weakened considerably in 2008, the agency said, and is expected to remain so with a debt-to-EBITDA ratio of more than 4x in 2009. That level is weak for its Baa3 rating, the agency said.

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