S&P Assigns 'AA' Rating to Dongseo Power's Senior Unsecured Dollar Bonds

[Asia Economy Reporter Moon Chaeseok] Global credit rating agency Standard & Poor's (S&P) announced on the 27th that it has assigned a long-term bond rating of 'AA' to the senior unsecured bonds in US dollars that Korea East-West Power ('AA·Stable·--') is preparing to issue.

According to S&P, East-West Power plans to use the funds raised from this bond issuance for general corporate purposes, including refinancing existing borrowings. The assigned rating may vary depending on the final issuance terms.

S&P assigned the same rating to East-West Power's senior unsecured bonds as the issuer credit rating, as it judged the subordinated risk to be limited.

As of the end of December last year, East-West Power's own unsecured borrowings amounted to approximately KRW 3.4 trillion. Its subsidiaries' unsecured borrowings were about KRW 70 billion.

S&P determined that there are no significant risks such as structural or contractual subordination in East-West Power's capital structure.

The proportion of East-West Power's senior debt is less than 5%, which is lower than S&P's bond rating adjustment threshold of 50%.

S&P evaluated East-West Power as a core subsidiary of Korea Electric Power Corporation (KEPCO) ('AA·Stable·A-1+').

S&P assigns KEPCO the same rating as South Korea's sovereign credit rating, reflecting KEPCO's special public status in implementing the Korean government's electricity supply policies.

For the same reason, East-West Power received a favorable evaluation. S&P views East-West Power as playing an integral role in KEPCO's stable electricity supply.

According to S&P, East-West Power and five other power generation subsidiaries under KEPCO are responsible for most of KEPCO's power generation, which accounts for about 80% of the domestic power generation market.

S&P judged that East-West Power has limited capacity to maintain its stand-alone credit profile of 'bbb-,' as it is affected by declining profitability and increased capital expenditures.

S&P analysts Park Daye and Kim Minjip explained, "Since East-West Power is assigned the same credit rating as the sovereign credit rating, a weakening of its stand-alone credit profile will not affect the institution's credit rating."

This content was produced with the assistance of AI translation services.