Moody’s lifts Korea view to positive

Moody’s Investors Service said it affirmed the Republic of Korea’s Aa3 issuer and senior unsecured rating and changed its outlook to positive from stable.

The outlook revision reflects the country’s improved management of public corporation debt, reduced vulnerability to global market turbulence and its ongoing track record of fiscal prudence, Moody’s said.

Moody’s also said it changed the country’s local-currency country risk ceiling to Aaa from Aa1.

The Aa1 foreign-currency bond and Aa3 foreign-currency bank deposit ceilings are unchanged. The P-1 country ceiling on foreign-currency bank deposits and debt also are unchanged, Moody’ said.

The agency also affirmed the Aa3 issuer rating and senior unsecured rating of its global bonds, as well as its provisional Aa3 senior unsecured shelf rating.

Recent policy measures have started to gain traction in improving operational efficiency and reducing the debt burden of non-financial state-owned corporations, Moody’ said.

This development is important because of the public policy role of these corporations and because their debt is a large contingent liability on the government’s otherwise strong balance sheet, the agency said.

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