'A+' Ratings On KNOC Affirmed; Outlook Positive; SACP Revised To 'bb+' From 'bb'

We expect modest improvement in KNOC's financial risk profile during the next two years, driven by the sale of noncore assets, reductions in capital expenditure, and increasing production volume from its overseas E&P assets. We are revising the SACP for KNOC to 'bb+' from 'bb' after applying our positive comparable rating analysis to reflect relative strength in the company's financial risk profile as its financials improve and it benefits from low coverage ratios thanks to its low funding costs as a key GRE in Korea. At the same time, we affirm our 'A+' foreign currency and 'AA-' local currency long-term corporate credit ratings and our 'A+' debt ratings on the company, which we equalize with the ratings on the Republic

...+ We expect modest improvement in KNOC's financial risk profile during the next two years, driven by the sale of noncore assets, reductions in capital expenditure, and increasing production volume from its overseas E&P assets. + We are revising the SACP for KNOC to '##+' from '##' after applying our positive comparable rating analysis to reflect relative strength in the company's financial risk profile as its financials improve and it benefits from low coverage ratios thanks to its low funding costs as a key GRE in Korea. + At the same time, we affirm our 'A+' foreign currency and '##-' local currency long-term corporate credit ratings and our 'A+' debt ratings on the company, which we equalize with the ratings on the Republic of Korea owing to our expectation of an "almost certain" likelihood of extraordinary government support in the event of financial distress at KNOC. + The positive outlook on the foreign currency ratings and stable outlook on the local currency ratings also reflect...

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