S&P Upgrades Korea to Investment GradeStandard & Poors, the U.S.-based world-renowned credit evaluating agency, leveled up Korea's sovereign rating, long-term foreign currency rating, from BB+ to BBB-(suitable for investment) on January 26.
It follows the U.K.-based Fitch IBCA, one of the world's three major evaluating companies. Moody's ,the other major credit rating agency is expected to raise Korea's sovereign rating, soon.
S&P dropped Korea's sovereign credit rating to 'unsuitable for investment' on December 23, 1997 when Korea was forced to receive an International Monetary Fund(IMF) bailout. Thirteen months later Korea has clawed its way back to once again reside in a financially respectable neighborhood.
On the strength of the news, many Korean-listed companies on foreign stock exchanges showed a strong surge.
S&P explained that the Korean government's lengthy efforts on long-term restructuring, advanced economic fundamentals compared to other rival countries, and a markedly changed attitude on foreign investment contributed to the upgrade.
It especially rated high the Korean government's actions in implementing 'open-door' policies, resolute watch on financial corruption, and flexibility of the labor market together with the people's gold collecting campaign, restraint on study abroad and remittance from outside countries.
A source from S&P said, 'If the current restructuring movement in private sectors keeps its momentum for the next one to three years, it is highly probable that Korea's rating will climb further. But there should be less political turmoil and labor disputes.'
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