Fitch: Korea outlook positive

Fitch Ratings said it affirmed Korea's long-term foreign-currency issuer default rating at A+ and revised the outlook to positive from stable. The long-term local-currency issuer default rating was affirmed at AA with a stable outlook. Also affirmed were the AA country ceiling and the F1 short-term foreign-currency issuer default rating.

"Sovereign creditworthiness is strengthening as the sovereign and external balance sheets grow more resilient," Andrew Colquhoun, head of Asia-Pacific Sovereigns at Fitch, said in a news release. "However, a heavy external debt refinancing burden in 2012 and the volatile global economic and financial environment pose risks for the export-oriented economy. Successfully navigating these challenges over 2012 would support the case for an upgrade."

Fitch believes that the local-currency issuer default rating is unlikely to be upgraded even in the event of a foreign-currency issuer default rating upgrade. Moderate public debt, fiscal prudence and funding opportunities afforded by deep domestic capital markets continue to warrant some uplift for the local-currency issuer default rating, the agency said, but the low fiscal revenue take of just 23% of GDP weighs on Korea's local-currency credit profile.

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