S&P lowers Korea Railroad

Standard & Poor's said it lowered its long-term corporate credit and senior unsecured debt ratings on Korea Railroad Corp. (Korail) to A from A+ and removed the ratings from CreditWatch, where they were placed with negative implications on March 14.

The outlook on the long-term corporate rating is stable.

At the same time, S&P lowered the stand-alone credit profile for Korail to b+ from bb-.

The rating downgrade reflects S&P's expectation that Korail's financial risk profile will deteriorate substantially in 2013, mainly due to its scrapping of its Yongsan property development project. S&P expects the company's adjusted debt to increase to about KRW 15.3 trillion as of Dec. 31, 2013 from about KRW 12.5 trillion a year earlier, largely due to the return of previously received land sale proceeds from the project.

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