Moody's: LG-Caltex positive

Moody's Investors Service said it affirmed its Baa2 senior unsecured rating of LG-Caltex Corp. and at the same time changed the company's outlook to positive from stable.

Moody's said the change in outlook reflects growing evidence of systemic support for the domestic oil sector in South Korea; and LG-Caltex's continuing strong association with ChevronTexaco Corp. (rated Aa2), following a strategic decision not to proceed with an initial public offering for LG-Caltex - which would have diluted ChevronTexaco's ownership level to below 50%.

The rating also considers the cyclicality inherent to the refining and marketing sector as well as the continued excess refining capacity apparent in South Korea, albeit such excess capacity has been gradually and slowly decreasing over time.

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