Moody’s upgrades KT

Moody's Investors Service said it upgraded KT Corp.'s senior unsecured debt rating to A3 from Baa1, along with the rating on its senior unsecured medium-term note program to provisional A3 from provisional Baa1.

The outlook is stable.

The upgrades reflect an expectation that KT's financial profile will continue to improve gradually over the next 12- to 18-months, given that its robust cash flow and sizable cash holdings will allow it to further reduce debt, the agency said.

KT's adjusted debt-to-EBITDA ratio is expected to decline to about 2x in the 12 months to September 2016 from 2.5x in 2014, Moody’s explained.

The agency also said it expects leverage to improve to 1.7x to 1.8x in 2017 and 2018.

Such a level of leverage would be consistent with the A3 rating category, Moody’s said.

Steady growth in the company’s broadband and IPTV segments, driven by its GiGA Internet service offering, is expected to offset expected declines in fixed-line telephony, the agency said.

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