S&P joins in upgrading credit rating of Korea
Korea now stands as the first country among those that scored higher than A ratings to be upgraded by Fitch Ratings, Moody’s Investors Service and Standard & Poor’s this year, the Ministry of Strategy and Finance said yesterday.
S&P moved Korea up to A+, its fifth-highest grade, and gave the country a “stable” outlook.
“The upgrade reflects our less negative assessment of the geopolitical risks on the Korean Peninsula. It follows what we judge to be a smooth change of leadership in the Democratic People’s Republic of Korea,” S&P said in an e-mailed statement.
“The stable outlook on the ratings on Korea reflects our expectations that the DPRK [Democratic People’s Republic of Korea, North Korea’s official name] will remain politically stable in the next three to five years.
“We could lower the ratings on signs that political instability in the DPRK threatens to trigger a sudden reunification or prolong heightened security tensions on the Korean peninsula. .?.?. On the other hand, we could raise the ratings if Korea sustains strong economic performance in the next few years and lifts its per capita GDP to levels more comparable with those of higher-rated sovereigns.”
It is the first time in seven years that S&P has raised Korea’s credit level. In July 2005, it upgraded it from A- to A.
The ministry said it has taken 15 years for the nation to recover its sovereign ratings from all three agencies to its pre-Asian financial crisis level in 1997.
On Aug. 28, Moody’s raised Korea’s sovereign rating from A1 to Aa3, putting it on par with China and Japan, the world’s second- and third-largest economies. Some 10 days later, Fitch upgraded Korea to AA- from A+.
“This is significant given that S&P, which has been the most conservative in terms of rating credit levels among internal appraisers, raised Korea’s rating,” Choi Jong-ku, a vice finance minister, said during a press briefing at the government complex in Gwacheon, Gyeonggi.
By Kim Mi-ju [firstname.lastname@example.org ]