Moody's rates Korea Expressway notes A1

Moody's Investors Service said it assigned an A1 rating to the proposed dollar-denominated senior notes to be issued by Korea Expressway Corp. (A1/stable) under its $3.5 billion global medium-term notes program.

The company plans to use the proceeds for general corporate purposes, including refinancing.

The agency said the ratings reflect the high likelihood of timely, extraordinary support from the Korean government to Korea Expressway because of its important policy roles and the high reputational and contagion risks that may arise if it defaults. They also factor in Korea Expressway's virtual monopoly on Korea's toll road industry, the relatively low volatility level of its operations and its strong access to the debt and banking markets, Moody's said.

At the same time, the ratings take into account the company's weak financial metrics due to its large and ongoing capex requirements as well as insufficient returns, given that expressway investments have long recovery cycles, Moody's said.

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