Fitch rates KT notes A

Fitch Ratings said it assigned a final rating of A to KT Corp.'s ¥5 billion notes due 2015, ¥18.2 billion notes due 2016 and ¥6.8 billion notes due 2018.

The final ratings follow the receipt of documents conforming to information already received and are in line with the expected ratings assigned Jan. 8, the agency said.

The notes are rated at the same level as KT's issuer default rating of A as they represent direct, unconditional, unsecured and unsubordinated obligations of the company, ranking equally with other senior unsecured debt and subject to a negative pledge clause, Fitch said.

However, as is common in Korean global bond issuance, the negative pledge clause does not protect bondholders from subordination through future grants of senior-ranking security interests to either debt-denominated in Korean won or debt in any currency with a maturity less than one year from the date of issue, 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, Fitch said, and the second-largest market share in the wireless segment.

But, the agency said it believes 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.

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