Moody’s cuts credit rating of nation’s largest steelmakerPosco had its credit rating lowered one level to the second-lowest investment grade by Moody’s Investors Service on concern the Korea’s largest steelmaker will struggle to cut debt amid a tough sales environment.
“Persistent weakness” in Asia’s steel industry will probably prevent Posco from making a significant improvement in profit margins, the credit ratings company said yesterday in a statement. It downgraded Posco’s foreign currency bond rating to Baa2 from Baa1.
The steelmaker reported a slump in third-quarter profit last month and cut its 2013 sales forecast for a second time.
“Posco’s high level of debt, the challenging fundamentals it faces in the steel industry and significant uncertainties about its ability to implement significant de-leveraging measures are key factors behind the rating downgrade,” said Chris Park, a Moody’s vice president and senior credit officer. Bloomberg
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