Bulletin: Effects Of Korea's Brush With Martial Law May Linger

This report does not constitute a rating action. SINGAPORE (S&P Global Ratings) Dec. 4, 2024--The introduction and swift revocation of martial law in the Republic of Korea has is very unexpected for a sovereign at the ?AA? rating level. However, S&P Global Ratings sees the negative impact on market sentiments as being contained within Korea?s current credit metrics and unlikely to trigger a rating change in the next year or two. The developments overnight likely undermined perceptions of political stability among investors. Nevertheless, the swift revocation of the martial law order and the return to relative stability without serious violence showed that checks and balance in the political system are functioning. We believe this will likely mitigate the damage to

...December 4, 2024 This report does not constitute a rating action. SINGAPORE (S&P Global Ratings) Dec. 4, 2024--The introduction and swift revocation of martial law in the Republic of Korea has is very unexpected for a sovereign at the `##' rating level. However, S&P Global Ratings sees the negative impact on market sentiments as being contained within Korea's current credit metrics and unlikely to trigger a rating change in the next year or two. The developments overnight likely undermined perceptions of political stability among investors. Nevertheless, the swift revocation of the martial law order and the return to relative stability without serious violence showed that checks and balance in the political system are functioning. We believe this will likely mitigate the damage to investor confidence. In our view, the quick return to normalcy also reflects the capacity of institutions in Korea (##/Stable/A-1+) to stabilize credit factors in the face of a negative shock. The announcement...

Bulletin