Moody's boosts Korea Electric

Moody's Investors Service said it upgraded to A1 from A2 the issuer rating and senior unsecured debt rating of Korea Electric Power Corp., along with its 100%-owned generation subsidiaries, to A1 from A2.

Those subsidiaries include Korea Hydro & Nuclear Power Co. Ltd., Korea East-West Power Co. Ltd., Korea Midland Power Co. Ltd., Korea South-East Power Co. Ltd., Korea Southern Power Co. Ltd. and Korea Western Power Co. Ltd.

The upgrade follows Moody's decision to upgrade South Korean government's long-term foreign-currency and local-currency ratings to A1 from A2.

The outlook is stable, consistent with the outlook on the government's ratings, the agency said.

As a government-related issuer, the rating is driven by the high likelihood of strong support from its majority shareholder, the South Korean government, in a distressed situation, Moody's said.

The rating also is underpinned by its dominant position in the power sector as Korea's only fully integrated utility, the agency said.

But, the company is exposed to fuel costs and currency movements due to the lack of a transparent and formula-based tariff adjustment mechanism, Moody's added.

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