Moody's: Leverage pressures Posco

Moody's Investors Service said that Posco's A2 rating will remain pressured by high leverage, which could grow in 2011 due to its sizeable investments and continued appetite for acquisitions.

The outlook is negative.

Posco announced that it would maintain the group's 2011 investments at KRW 9.8 trillion. This includes KRW 2 trillion in growth investments, particularly for potential acquisitions, the agency said.

Despite a modest year-over-year decline, the company's investments will be significantly higher than its projected operating cash flow in 2011, Moody's said.

The consequent increase in debt could weaken its financial profile further, which is already at the low end of the A2 rating, the agency said.

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