Fitch rates KT notes A

Fitch Ratings said it assigned an expected rating of A(EXP) to KT Corp.'s proposed Japanese yen-denominated senior notes. The company has an A issuer default rating and stable outlook.

The agency said the ratings reflect KT's position as a fully diversified telecommunications operator in South Korea, with leading market positions in the fixed-line and broadband businesses, and the second-largest market share in the wireless segment.

However, Fitch believes that the company has little rating headroom and that further declines in telecom service margins or EBITDA are likely to lead to a negative rating action.

The agency forecasts that KT's ratio of net debt to operating EBITDAR will fall below 1.5 times in 2013. It was 1.7 times at the end of 2011.

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