S&P cuts Posco Engineering

Standard & Poor's said it had lowered its long-term corporate credit rating on Posco Engineering & Construction Co. Ltd. to BBB- from BBB. The outlook is negative.

The agency said the downgrade reflects its view that the likelihood of extraordinary support from its parent, Posco, in the event of financial distress, has fallen. S&P said the ability of the parent to provide support is unlikely to improve significantly over the next 12 to 24 months.

Thus the agency said it reduced the two rating notches of support from the parent embedded in the ratings on Posco Engineering & Construction to one notch.

The company's stand-alone credit profile remains BB+. Its business risk profile remains satisfactory and its financial risk profile remains significant.

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