Moody's Maintains Gas Gong Credit Rating at 'Aa2'... "Expanding Role with HPS System"

Gas Corporation "Overseas Investment Expected to Positively Influence Investor Sentiment"

Exterior view of the Korea Gas Corporation headquarters building. (Photo by Korea Gas Corporation)

[Asia Economy Reporter Moon Chaeseok] Korea Gas Corporation announced on the 26th that the international credit rating agency Moody's has maintained the corporation's long-term credit rating at 'Aa2', the same as the national rating. It is expected that the corporation will maintain a leading position in Korea's gas industry.

According to Korea Gas Corporation, Moody's cited as the main reason that "based on the support of a government with a high credit rating, the corporation maintains a leading position in the gas industry and continues to play a strategic role."

Moody's positively evaluated "the expanded role of Korea Gas Corporation following the implementation of the Hydrogen Power Obligation System (HPS) recently announced by the (Korean) government and the ongoing hydrogen projects that align with government policy direction and play a leading role."

The corporation's standalone credit rating remained at Baa3. Moody's stated, "The recently revised city gas raw material cost linkage system has improved the timeliness of rate reflection, enhancing cash flow in the regulated industry along with power generation, and the reduction in operating funds will alleviate borrowing burdens."

It added, "Despite difficult management conditions such as sales decline due to the novel coronavirus disease (COVID-19) and impairment of overseas projects, it is expected to maintain sound financial indicators, so the standalone credit rating will also be maintained at the current level."

A Korea Gas Corporation official said, "Maintaining the 'Aa2' credit rating, the same as the government, despite various adverse factors such as the decline in oil prices, will have a positive impact on overseas investors' investment sentiment," and added, "It is expected that foreign currency bonds can be issued under more competitive conditions."

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