Moody's rates Korail notes A2

Moody's Investors Service said it assigned an A2 senior unsecured rating to Korea Railroad Corp.'s proposed five-year $300 million notes and affirmed Korail's A2 issuer rating.

The outlook is stable.

Proceeds will be used for general corporate purposes, including capital expenditure and debt refinancing.

"The A2 rating primarily reflects Korail's distinct policy role and high operational integration with the government, as well as regular government financial assistance," Chris Park, Moody's analyst, said in a written statement.

"These factors suggest that Korail's credit profile is closely linked to that of the government," the analyst said.

The company's credit metrics are weak for its rating, a result of inadequate railway tariff levels and large legacy debt it assumed from Korea High-Speed Rail Construction Authority, the agency said.

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