Moody's upgrades LG Chem

Moody's Investors Service said it upgraded LG Chem, Ltd.'s issuer and senior unsecured ratings to A3 from Baa1. The agency also raised to A3 from Baa1 the senior unsecured ratings on LG Energy Solution, Ltd.'s notes that LG Chem guarantees.

Moody’s also revised the outlooks on LG Chem and LGES to stable from positive.

The upgrade reflects the large proceeds raised LGES raised from its initial public offering last month, which will enable LG Chem to maintain sound financial metrics and a significant financial buffer over the next couple of years, despite its sizable capital spending, said Wan Hee Yoo, a Moody's vice president and senior credit officer, in a press release.

"The rating action also reflects our expectation that LG Chem's large investments will lead to greater business diversification, in particular given the high revenue visibility in its fast-growing battery business," added Yoo.

The outlook indicates LG Chem will maintain sound financial metrics over the next 1-2 years, underpinned by its considerable cash buffers.

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