Moody's rates Posco proposed notes A1

Moody's Investors Service said it affirmed Posco's A1 foreign-currency bond rating and changed the outlook to negative from stable. Moody's also said it assigned an A1 rating to Posco's proposed senior unsecured dollar-denominated notes with a negative outlook.

The change in outlook to negative reflects an expected deterioration in Posco's operating performance against the backdrop of the severe downturn in the global steel industry, Moody's said.

The global steel industry has exhibited recessionary conditions, as demonstrated by a sharp drop in product prices and demand, the agency said.

Consequently, Posco's earnings should come under pressure, while unfavorable exchange rate movements could exacerbate the situation, Moody's added.

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