Moody's rates Posco notes A3

Moody's Investors Service said it assigned an A3 rating to Posco's proposed senior unsecured yen-denominated notes with a stable outlook.

The proceeds will be used for general corporate purposes.

The rating reflects Posco's dominant position in Korea's steel sector, substantial scale by world standards and strong profitability measures, mainly driven by its globally competitive cost position, Moody's said.

Further support for its rating comes from its favorable product mix, which is well balanced between value-added and commodity products, the agency said.

The rating also considers the cyclicality of the steel industry and its vulnerability to hikes in raw material prices given its limited backward integration, Moody's said.

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