Moody’s rates SR A2

Moody’s Investors Service said it assigned a first-time A2 issuer rating to SR Co., Ltd., which is 41% owned by Korea Railroad Corp. (Korail).

The outlook is stable.

The rating is primarily driven by its close operational relationship with and ownership by Korail, as well as SR’s strategic importance to the Korean government, Moody’s said.

As a result, SR will likely receive support from Korail and the government when needed, the agency said.

The rating also incorporates a six-notch uplift from its standalone credit strength, Moody’s said. The uplift reflects Korail’s and the Korean government’s strong commitment to support SR, the agency said.

SR’s standalone credit strength exhibits a non-investment grade credit profile, reflecting the lack of an operating track record and significant ramp-up risk associated with a new high-speed train line that is expected to start operating in the fourth quarter of 2016, Moody’s said.

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