S&P assigns AA to KNOC notes

S&P said it assigned an AA long-term issue rating to Korea National Oil Corp.'s planned U.S. dollar senior unsecured notes. The company will draw down the notes from its $12 billion global medium-term note program.

“We rate the senior unsecured notes the same as the long-term issuer credit rating on KNOC (AA/stable/--). We do not see material structural or contractual subordination risks in the company's capital structure. KNOC has a priority debt ratio of about 7%, lower than our notching-down threshold of 50%,” S&P said in a press release.

However, “KNOC will remain highly leveraged, with a ratio of adjusted debt to EBITDA of 10x-11x in 2023-2024, compared with 6.7x in 2022 and 16x in 2021. This is mainly due to the company's declining profitability owing to lower oil production volume, and high debt,” the agency added.

It will use the proceeds for general corporate purposes, including refinancing debt obligations.

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