Fitch rates Korea National Oil bonds AA-

Fitch Ratings said it assigned a final rating of AA- to Korea National Oil Corp.’s dollar-denominated bonds.

The bonds were issued in two tranches: a $500 million issue due 2021 and a $500 million issue due 2026.

The bonds were issued under the company’s global medium-term note program, which also has an AA- rating.

The proceeds will be used to refinance existing debt and 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, the agency said.

The company’s ratings are equalized with the sovereign rating, Fitch said as it plays a significant strategic and operational role in the country.

This entails the acquisition of oil and gas reserves, exploration and production activities to improve the country’s self-sufficiency and managing the country’s oil reserves, the agency said.

The company’s operations, however, have been affected by low oil prices, deteriorating the company’s revenue and profitability, Fitch said.

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