Moody's rates Kia Motors Ba1

Moody's Investors Service said it downgraded Kia Motors Corp.'s issuer rating to Ba1 from Baa3 and withdrawn the rating. Moody's also said it assigned a Ba1 corporate family rating to Kia.

The outlook is negative.

This concludes a review that began in January.

The action primarily reflects the company's limited ability to turn around its weak financial profile amid the highly challenging operating environment, despite its continued out-performance in terms of auto sales compared to global rivals, Moody's said.

Despite a modest earnings improvement on the back of a healthy 8.4% year-over-year growth in shipments in 2008, its key credit metrics remain weak due to hefty negative free cash flow and inflated debt stemming from depreciation of the Korean won, the agency said.

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