Moody's rates Hankook notes Baa2

Moody's Investors Service said it assigned a Baa2 rating to the proposed senior unsecured dollar-denominated notes to be issued by Hankook Tire Co., Ltd.

The outlook is stable.

The proceeds will be used for working capital, capital spending, repayment of existing debt and other general corporate purposes, Moody's said.

The ratings reflect the company's high operating efficiency as demonstrated by its robust profitability, low financial leverage and leadership in the domestic tire market in Korea, the agency said.

The ratings also consider Hankook's good business stability supported by globally diversified revenue and large earnings contribution from its replacement equipment tire business, which is inherently less volatile than its original equipment tire business, Moody's said.

The ratings are constrained by its moderate scale relative to global top-tier tire manufacturers, the agency added.

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