Moody's rates KT notes A3

Moody's Investors Service said it affirmed South Korea-based KT Corp.'s A3 corporate credit rating and assigned an A3 senior unsecured debt rating to the company's proposed $200 million notes due 2016. The outlook is stable.

Proceeds are expected to be used to refinance maturing debt.

Moody's said the company's ratings reflect its leading position in the Korean telecommunications and its sound financial profile, including significant revenue and cash flow generating capabilities, based on its ubiquitous network, large customer base, solid operating margins and moderate re-investment requirements.

The potential remains for downward pressure on margins due to increasing competition across the key areas of cellular and broadband technologies, the agency noted. Additionally, the ongoing need to adopt new technologies presents a credit challenge, given that the fast-moving nature of the South Korean telecommunications market and consequent technological obsolescence may boost capex and limit the profitability of superseded products.

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