Fitch rates Korea National Oil bond AA-

Fitch Ratings said it assigned an expected rating of AA- to Korea National Oil Corp.’s proposed dollar-denominated bond.

The bond will be issued under the company’s global medium-term note program, which also is rated AA-. The company also increased the size of the program to $9 billion from $8 billion.

The proceeds will be used to refinance existing debt and for general corporate purposes, Fitch said.

The notes are rated at the same level as the company’s senior unsecured rating as they represent direct, unconditional, unsecured and unsubordinated obligations of the company, the agency said.

The ratings are equalized with Korea’s sovereign ratings due to the company’s strong strategic and operational ties with the state, Fitch said.

Korea National Oil is a key vehicle in the execution of Korea’s energy policy, the agency said.

But, the company’s standalone credit profile remains weak for its rating levels due to major debt-funded acquisitions in recent years, the agency added.

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