Fitch rates Kepco generation companies

Fitch Ratings said it assigned ratings to the six generation companies (gencos) of Korea Electric Power Corp. (Kepco, A/F1, stable).

Korea Hydro & Nuclear Power Co., Ltd. was assigned an A senior unsecured and F1 short-term foreign currency rating and 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. were assigned A- senior unsecured and F2 short-term foreign currency ratings, Fitch said.

The outlook o is stable.

Fitch noted the ratings incorporate its assessment of the fundamental strengths of Korea's power industry, which includes the steady electricity demand growth supported by healthy economic progress, the systematic expansion in generation capacity while maintaining sound reserve margins, the conscientious effort to reduce reliance on oil that resulted in a balanced generation fuel mix comprising coal, petroleum and nuclear energy and good access to capital market and bank funding.

KHNP's relatively stronger ratings reflect its continuing ownership by Kepco and its leadership in Korea's power generation sector, where it accounts for about a third of the nation's power generation, Fitch added, noting the ratings of the five non-nuclear gencos reflect their importance to the reliable supply of electricity in Korea with each having over 10% market share and their generally healthy operating statistics and credit metrics.

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