S&P downgrades Posco to A-

Standard & Poor's said it lowered to A- from A its long-term corporate credit and debt ratings on Posco. The outlook on the long-term corporate credit rating is negative.

S&P said the ratings downgrade reflects its expectation that Posco's financial risk profile will continue to deteriorate over the next 12 months.

S&P said it expects the company's ratio of debt to EBITDA to exceed 2x, the threshold that the agency previously assessed would trigger a downgrade, and to reach 2.7x in 2011 and 2.9x in 2012, due to weak operating performance as a result of slowing demand for steel and an erosion of its competitive position. Still-high levels of capital expenditure during the same period are likely to contribute to the deterioration of its financial risk profile, the agency said.

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