S&P upgrades Kepco

Standard & Poor’s said it raised the long-term corporate credit ratings on Korea Electric Power Corp. (Kepco) to AA- and its short-term rating to A-1+.

The agency also said it raised to AA- the long-term corporate credit ratings on its subsidiaries, including Korea Hydro & Nuclear Power Co. Ltd., Korea East-West Power Co. Ltd., Korea Midland Power Co. Ltd., Korea South East Power Co. Ltd., Korea Southern Power Co. Ltd. and Korea Western Power Co. Ltd.

S&P also raised the debt ratings on Kepco and its six subsidiaries to AA-.

The outlook on all of the companies is stable.

The stand-alone credit profile for Kepco remains at BBB and on the six subsidiaries BBB-.

The upgrades reflect a reassessment of a higher likelihood that the government of Korea will provide extraordinary support to the companies in the event of financial distress, S&P said.

Kepco now has a stronger link with the government, the agency said, noting the legal framework for and strong track record of support that the government has previously provided.

Despite the government’s majority (not full) ownership of the company, S&P said it believes the government exerts dominant control and influence on management and governance, and drives its overall strategy.

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