Moody's: Hankook Tire Baa2

Moody's Investors Service said it assigned a first-time Baa2 issuer rating to Hankook Tire Co., Ltd.

The outlook is stable.

The rating primarily reflects the company's high operating efficiency as evidenced by its robust profitability, low financial leverage and leadership position in the domestic tire market, Moody's said.

The company's average adjusted EBITA margin of 15.5% between 2014 and 2016 is one of the highest among global tire manufacturers, the agency said, and reflected the operating leverage stemming from its large-scale production bases in Korea, China, Hungary and Indonesia.

The company's exposure to volatile raw material prices is limited because it has the ability to pass those prices through to end-customers, Moody's said.

The ratings are constrained by Hankook's moderate scale relative to global top-tier tire manufacturers, the agency said.

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