S&P upgrades Korea

Standard & Poor’s said it raised the long-term foreign-currency sovereign rating on the Republic of Korea to AA- from A+, along with its short-term foreign-currency sovereign rating to A-1+ from A-1.

The agency also said it affirmed the country’s long-term local-currency rating at AA- and short-term local-currency rating at A-1+.

The outlook is stable.

S&P also said it raised the transfer and convertibility assessment for Korea to AA+ from AA.

The upgrades reflect an opinion that Korea will maintain economic growth performance superior to most developed economies in the next three to five years, S&P said.

The country has seen a decline in external debts owed by Korean depository financial institutions and a reduced share of short-term borrowings in total debt since mid-2012, the agency said.

The ratings also consider the country’s favorable policy environment, sound fiscal position and net external creditor position, S&P said.

Significant security risks and contingent liabilities offset these strengths, the agency added.

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