S&P lifts Posco view to stable

Standard & Poor’s said it revised the outlook on the BBB+ long-term corporate credit rating on Posco to stable.

The agency also said it affirmed the company’s BBB+ long-term corporate credit and debt ratings.

The ratio of Posco’s debt-to-EBITDA is expected to improve and remain below a downgrade trigger of 3.5x over the next 24 months because of a reversal of factors that previously weakened the company’s credit quality, S&P said.

Improved credit metrics can be attributed to the company’s significant non-debt financing, declining capital investment and stabilizing operating performance, the agency said.

In recent years, Posco made significant debt-financed acquisitions and then faced a severe downturn in the steel industry, S&P said.

Domestic competition has picked up sharply and the company has increased capital investments aimed at further integration and geographical expansion, the agency said.

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