Moody's: Posco negative

Moody's Investors Service said it revised the outlook for the Baa3 issuer rating of Posco Engineering & Construction Co. Ltd. to negative from stable.

"The rating action primarily reflects an increasing likelihood that Posco E&C's financial profile will remain weak for its Ba2 standalone rating over the next 12 to 18 months, given its tepid 1H 2012 results and the challenges it faces in boosting profits," said Chris Park, a Moody's vice president and senior credit officer in a news release.

As a result of weaker earnings and higher investments, Moody's said it expects Posco's adjusted debt/EBITDA to exceed 8x in 2012, a level that will not support the Ba2 standalone rating.

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