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 is also rated AA-.

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

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

The ratings are equalized with the sovereign rating due to the company’s significant strategic and operational role in the country, the agency said.

The company’s revenue and profitability deteriorated in 2015, reflecting significantly lower oil prices than in 2014, Fitch said.

The company’s average selling prices for oil fell 46% and for gas dropped 33% in 2015. As a result, revenue fell by 21% and EBITDA by 46%, Fitch said.

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