Moody's rates Korail notes Aa2

Moody's Investors Service said it assigned a provisional Aa2 rating to Korea Railroad Corp.'s (Korail) $2 billion medium-term note program.

Moody's also said it assigned an Aa2 rating to the senior unsecured euro notes that will be issued under the program.

The outlook is stable.

The proceeds will be used for general corporate purposes, including the refinancing of maturing debt, Moody's said.

The ratings primarily reflect an assessment of a very high likelihood of extraordinary support from the Korean government because of Korail's strategic importance as an effectively monopolistic railway operator in Korea and the government's low tolerance for reputational and contagion risks, the agency said.

Government support is the predominant rating driver for Korail, Moody's added.

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