S&P rates Kia bonds BBB-

Standard & Poor's said it assigned its BBB- rating to Kia Motors Corp.'s (BBB-/stable) senior unsecured bonds proposed under regulation S, due 2012. The rating is subject to final documentation.

The rating reflects the company's close relationship and expected strong support from its parent company, Hyundai Motor Co. (BBB-/stable). Currently, the rating is the same as the ratings on its parent Hyundai based on the following factors - Hyundai and Kia share a common chairman, Kia's chief executive is the son of the chairman and Kia will continue to play an important role in helping Hyundai realize its ambitious growth goals.

The rating also reflects Kia's aggressive expansion strategy, exposure to foreign-currency fluctuation, weak but improving brand image and unstable relationship with labor unions, the agency said.

These factors are offset by the company's well diversified geographic sales base, growing market position in the global market, its No. 2 position in the domestic automobile industry and its favorable cost position, S&P added.

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