Moody's rates Korea bonds Aa3

Moody's Investors Service said it assigned a provisional Aa3 rating to the Republic of Korea's global bond offering. The outlook is stable.

The agency said the Korean government's Aa3 rating and the country's Aa1 foreign-currency bond ceiling reflect Korea's very high economic strength, institutional strength and fiscal strength but also its moderate susceptibility to event risks from North Korean military provocations or regime instability.

In Moody's view, the two prominent rating constraints are the sharp rise in public-sector, non-financial corporation debt since the global financial crisis, which implies contingent risks to the government as public corporations' financial profiles are generally weak, and relatively elevated household debt, which magnifies the vulnerability of consumption expenditure and economic growth to an interest rate shock.

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