국제 신용평가기관인 무디스가 한국전력과 한국수력원자력 등 한국전력 자회사에 대해 신용등급을 하향 조정했다.
24일 무디스는 한국전력의 발행자 등급과 선순위 무담보 채권의 신용등급을 기존 'A1'에서 'A2'로 하향 조정했다고 밝혔다.
무디스는 또 한국전력의 자회사인 한국수력원자력과 한국동서발전, 한국중부발전, 한국남동발전, 한국남부발전, 한국서부발전 등 6개사의 발행자 신용등급과 선순위채권등급도 'A1'에서 'A2'로 하향 조정했다고 밝혔다.
무디스측은 이번 한국전력과 자회사들의 등급평가에서 높은 연료비용과 환율변동성에 따른 재무여건 악화 우려가 반영됐다고 등급 조정 배경에 대해 설명했다.
다음은 무디스의 발표 전문이다.
Moody's downgrades KEPCO and subsidiaries to A2; outlook stable
Approximately US$5.3 billion of debt securities affected
Hong Kong, March 24, 2009 -- Moody's Investors Service has downgraded to A2 from A1 the issuer rating and senior unsecured debt rating of Korea Electric Power Corporation (KEPCO). At the same time, Moody's has downgraded the following ratings of KEPCO's 100%-owned generation subsidiaries, or gencos, to A2 from A1:
1) Korea Hydro & Nuclear Power Co Ltd (KHNP): A2 issuer rating, senior unsecured debt rating
2) Korea East-West Power Co Ltd (EWP): A2 issuer rating and senior unsecured debt rating
3) Korea Midland Power Co Ltd (KOMIPO): A2 issuer rating and senior unsecured debt rating
4) Korea South-East Power Co Ltd (KOSEP): A2 issuer rating and senior unsecured debt rating
5) Korea Southern Power Co Ltd (KOSPO): A2 issuer rating and senior unsecured debt rating
6) Korea Western Power Co Ltd (KOWEPO): A2 issuer rating and senior unsecured debt rating
"The rating action reflects heightened concerns over the deterioration in KEPCO's financial profile as a result of its exposure to high fuel costs and currency movement," says Jennifer Wong, a Moody's Assistant Vice President, adding, "Although fuel prices have eased since mid-2008, any cost savings have been offset by the sharp fall in the Won as KEPCO has not hedged its USD-denominated fuel costs."
"The expected weak electricity demand growth, which closely tracks economic growth, will likely add further pressure on KEPCO's deteriorating financial performance," says Wong.
"The 4.5% tariff rise implemented in November and the KRW668 billion one-off subsidy provided by the government have not been sufficient to offset the losses due to high fuel costs and currency devaluation. This, against the backdrop of an inefficient cost pass through mechanism, will likely translate into weaker credit metrics for the next 2-3 years," she adds.
KEPCO's projected financial metrics, as highlighted by average Adjusted Retained Cash Flow (RCF)/Debt of 20% and Funds from Operations (FFO)/Interest of 5x for 2010 to 2011, against the backdrop of the challenging economic environment in Korea and expected weak near-term electricity demand growth, remain more consistent with an A2 rating level on a stand-alone basis.
KEPCO's rating also incorporates the strong credit support that Moody's believes the Korean government is likely to provide -- under the Joint Default Analysis approach applied to government-related issuers - in view of its 51% stake in the company and KEPCO's strategic importance to the country as the only vertically-integrated electric utility. Such approach does not provide any uplift to the final A2 rating.
The downgrade of the gencos reflects their close relationship with KEPCO, given the latter's 100% ownership interest and role as the sole off-taker, which suggests that the credit quality for the gencos and KEPCO is closely linked.
The stable outlook reflects Moody's expectation that the KEPCO will maintain its dominant position in Korea's power sector. It is also based on expectations that there will be no material adverse changes in the regulatory environment in the near to medium term.
The possibility of near-term upward rating pressure is limited given the challenging operating environment and expected weakening in KEPCO's financial profile.
However, upward rating pressure could evolve over time with a material improvement in its stand-alone credit strength due to: 1) the establishment of a transparent and formula-based tariff mechanism, allowing for timely and automatic cost pass-through; 2) material improvements in its cash-generating ability and/or debt reduction, such that FFO/Interest is greater than 8-9x and RCF/Debt remains above 30-35%.
As KEPCO's rating is closely linked to the sovereign rating -- given its close relationship with and expected strong support from the government -- a sovereign upgrade would also trigger an upgrade of its rating.
On the other hand, downward rating pressure would emerge if the company's stand-alone credit strength deteriorates substantially, such that FFO/Interest is less than 3- 4x and RCF/Debt remains below 15% over the cycle, at the same time as either there is a weakening of government support or there is a downgrade of the sovereign rating.
The last rating action with respect to KEPCO and the gencos was taken on 6 February 2009, when their ratings were put on review for possible downgrade.
The principal methodology used in rating this issuer was Rating Methodology: Global Regulated Electric Utilities which can be found at www.moodys.com in the Credit Policy & Methodology directory, in the Ratings Methodologies subdirectory.
Korea Electric Power Corporation (KEPCO) is Korea's only fully-integrated electric utility and is the monopoly operator of the country's electricity transmission and distribution (T&D) system.
KEPCO generates over 90% of the electricity consumed in Korea through its 6 wholly-owned gencos (KHNP, EWP, KOMIPO, KOSEP, KOSPO and KOWEPO), which were all spun off in April 2001.
24일 무디스는 한국전력의 발행자 등급과 선순위 무담보 채권의 신용등급을 기존 'A1'에서 'A2'로 하향 조정했다고 밝혔다.
무디스는 또 한국전력의 자회사인 한국수력원자력과 한국동서발전, 한국중부발전, 한국남동발전, 한국남부발전, 한국서부발전 등 6개사의 발행자 신용등급과 선순위채권등급도 'A1'에서 'A2'로 하향 조정했다고 밝혔다.
무디스측은 이번 한국전력과 자회사들의 등급평가에서 높은 연료비용과 환율변동성에 따른 재무여건 악화 우려가 반영됐다고 등급 조정 배경에 대해 설명했다.
다음은 무디스의 발표 전문이다.
Moody's downgrades KEPCO and subsidiaries to A2; outlook stable
Approximately US$5.3 billion of debt securities affected
Hong Kong, March 24, 2009 -- Moody's Investors Service has downgraded to A2 from A1 the issuer rating and senior unsecured debt rating of Korea Electric Power Corporation (KEPCO). At the same time, Moody's has downgraded the following ratings of KEPCO's 100%-owned generation subsidiaries, or gencos, to A2 from A1:
1) Korea Hydro & Nuclear Power Co Ltd (KHNP): A2 issuer rating, senior unsecured debt rating
2) Korea East-West Power Co Ltd (EWP): A2 issuer rating and senior unsecured debt rating
3) Korea Midland Power Co Ltd (KOMIPO): A2 issuer rating and senior unsecured debt rating
4) Korea South-East Power Co Ltd (KOSEP): A2 issuer rating and senior unsecured debt rating
5) Korea Southern Power Co Ltd (KOSPO): A2 issuer rating and senior unsecured debt rating
6) Korea Western Power Co Ltd (KOWEPO): A2 issuer rating and senior unsecured debt rating
"The rating action reflects heightened concerns over the deterioration in KEPCO's financial profile as a result of its exposure to high fuel costs and currency movement," says Jennifer Wong, a Moody's Assistant Vice President, adding, "Although fuel prices have eased since mid-2008, any cost savings have been offset by the sharp fall in the Won as KEPCO has not hedged its USD-denominated fuel costs."
"The expected weak electricity demand growth, which closely tracks economic growth, will likely add further pressure on KEPCO's deteriorating financial performance," says Wong.
"The 4.5% tariff rise implemented in November and the KRW668 billion one-off subsidy provided by the government have not been sufficient to offset the losses due to high fuel costs and currency devaluation. This, against the backdrop of an inefficient cost pass through mechanism, will likely translate into weaker credit metrics for the next 2-3 years," she adds.
KEPCO's projected financial metrics, as highlighted by average Adjusted Retained Cash Flow (RCF)/Debt of 20% and Funds from Operations (FFO)/Interest of 5x for 2010 to 2011, against the backdrop of the challenging economic environment in Korea and expected weak near-term electricity demand growth, remain more consistent with an A2 rating level on a stand-alone basis.
KEPCO's rating also incorporates the strong credit support that Moody's believes the Korean government is likely to provide -- under the Joint Default Analysis approach applied to government-related issuers - in view of its 51% stake in the company and KEPCO's strategic importance to the country as the only vertically-integrated electric utility. Such approach does not provide any uplift to the final A2 rating.
The downgrade of the gencos reflects their close relationship with KEPCO, given the latter's 100% ownership interest and role as the sole off-taker, which suggests that the credit quality for the gencos and KEPCO is closely linked.
The stable outlook reflects Moody's expectation that the KEPCO will maintain its dominant position in Korea's power sector. It is also based on expectations that there will be no material adverse changes in the regulatory environment in the near to medium term.
The possibility of near-term upward rating pressure is limited given the challenging operating environment and expected weakening in KEPCO's financial profile.
However, upward rating pressure could evolve over time with a material improvement in its stand-alone credit strength due to: 1) the establishment of a transparent and formula-based tariff mechanism, allowing for timely and automatic cost pass-through; 2) material improvements in its cash-generating ability and/or debt reduction, such that FFO/Interest is greater than 8-9x and RCF/Debt remains above 30-35%.
As KEPCO's rating is closely linked to the sovereign rating -- given its close relationship with and expected strong support from the government -- a sovereign upgrade would also trigger an upgrade of its rating.
On the other hand, downward rating pressure would emerge if the company's stand-alone credit strength deteriorates substantially, such that FFO/Interest is less than 3- 4x and RCF/Debt remains below 15% over the cycle, at the same time as either there is a weakening of government support or there is a downgrade of the sovereign rating.
The last rating action with respect to KEPCO and the gencos was taken on 6 February 2009, when their ratings were put on review for possible downgrade.
The principal methodology used in rating this issuer was Rating Methodology: Global Regulated Electric Utilities which can be found at www.moodys.com in the Credit Policy & Methodology directory, in the Ratings Methodologies subdirectory.
Korea Electric Power Corporation (KEPCO) is Korea's only fully-integrated electric utility and is the monopoly operator of the country's electricity transmission and distribution (T&D) system.
KEPCO generates over 90% of the electricity consumed in Korea through its 6 wholly-owned gencos (KHNP, EWP, KOMIPO, KOSEP, KOSPO and KOWEPO), which were all spun off in April 2001.
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