Moody's rates Korea District Heating A2

Moody's Investors Service said it assigned a first time A2 issuer rating to Korea District Heating Corp.

The outlook is stable.

The rating is based on the company's underlying strength of 9, which is equivalent to a Baa2 rating on Moody's global scale, the agency said, and support the Korean government is likely to provide in a distressed situation.

The underlying credit strength of 9 reflects the company's dominant market position, a supportive regulatory framework, its policy role in Korea's district heating industry, the monopoly status it enjoys in operational areas and its strong access to the debt markets, Moody's said.

The underlying credit strength also considers its weak credit metrics and the lack of a transparent tariff adjustment mechanism, the agency said, and uncertainties over the upcoming revision of the regulatory framework.

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