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Moody's: South Korea's Public Sector Restructuring Unlikely to Impact Credit Ratings of Major State-Owned Firms
Finance · Major Banks · yonhap_finance · 2026-09-08
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Moody's Investors Service stated that the South Korean government's public institution reform plan will not significantly alter the credit profiles of major firms.
What Happened
Moody's Assessment: International credit rating agency Moody's expects that the South Korean government's recent public institution reform plan will have a limited impact on the credit ratings of the affected entities. The agency noted that these ratings are primarily underpinned by the high likelihood of government support.
Key Entities Involved: The reform plan includes the integration of Korea Electric Power Corp's (KEPCO) thermal power subsidiaries, the merger of Korea Gas Corp and Korea National Oil Corp, and the split of Korea Land and Housing Corp (LH). Moody's believes these structural changes will not diminish the strategic importance of these organizations.
Strategic Importance: Moody's maintains that as long as these entities continue to play a central role in energy security and public policy, the government's support framework will remain intact. Regarding the split of LH, the agency pointed out that the joint liability structure ensures existing debt remains unaffected.
Future Outlook: Moody's cautioned that the plan is still in the proposal stage, with implementation timelines remaining uncertain due to the need for legislative approval and detailed planning. The agency clarified that this report does not constitute a formal credit rating action.