Moody's downgrades Posco

Moody's Investors Service said it downgraded Posco's foreign-currency bond rating to A3 from A2.

The outlook is stable.

This concludes a review for possible downgrade that began in March.

The action primarily reflects a weakening in Posco's financial profile given its ambitious investment strategy for the steel and non-steel businesses, Moody's said.

This, along with the persistently large working capital deficits stemming from high raw material prices and its increased leverage in 2010, suggests that its key financial metrics would not sustain the A2 rating, the agency said.

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