S&P rates Korea bonds A

Standard & Poor's said it assigned its A long-term foreign currency senior unsecured debt rating to the Republic of Korea's (foreign currency A/stable/A-1, local currency A+/stable/A-1) proposed benchmark size dual-currency global bonds.

"The rating reflects Korea's economic, fiscal and external strengths, which are balanced against its high contingent risks and the delays in Korea's implementation of structural reforms - including labor market and SME sector reform," said S&P credit analyst Takahira Ogawa.

Since Korea's public sector became a net external creditor in 2000, the government's net external position has strengthened because of rising reserves and is projected to reach 48% of current account receipts for 2006, the agency said.

Korea has reported a general government surplus since 2000, averaging 1.4% of GDP, including social security and excluding lending to the financial sector, the agency added.

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