S&P rates LG-Caltex bonds BBB

Standard & Poor's assigned its BBB rating to LG-Caltex Oil Corp.'s (BBB/positive/A-2) proposed $300 million global bonds with a tenor of up to 10 years.

"The rating on LG-Caltex reflects the company's strong operating performance, improved debt position and moderate overall financial profile," said S&P credit analyst Eun Jin Kim. "LG-Caltex has maintained its position as Korea's second-largest oil refining and marketing company despite inherent risks, such as deregulation and the increasing market penetration of imported refined products," Kim added.

S&P said the company's profitability is subject to fluctuations in crude oil prices and foreign exchange rates, reflecting its dependence on imported oil. Its earnings are also vulnerable to the pricing behavior of other industry participants and a weakened ability to pass through costs to consumers due to deregulation.

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