SEOUL: Ratings agency Standard & Poor's confirmed its sovereign credit ratings on South Korea Wednesday and said the outlook was stable, citing fiscal soundness and a net external creditor position.
A week after the agency threatened downgrades for 15 eurozone countries and the European Union, it affirmed the Asian nation's "A" foreign currency and "A+" local currency long-term sovereign credit ratings.
The ratings scale stretches from a top-grade AAA down to D for debt that is already in default.
"The outlook is stable," the agency said, adding that its ratings on South Korea reflected a political and economic profile labelled "intermediate" and an assessment of the country's flexibility and performance as "very strong".
"South Korea's favorable policy environment, sound fiscal position, and a net external creditor position lend support to the government's creditworthiness," it said.
"These strengths are balanced against the significant security risks and contingent liabilities that the sovereign faces."
It added praise for the "policy environment has helped to promote significant economic development over a number of decades" and the government's healthy fiscal position.
Geopolitical risks have increased in the last two to three years due to uncertainties over a possible North Korean leadership change, the agency said.
But the stable outlook reflects "our expectations that geopolitical tensions will not escalate markedly from current levels", S&P said.
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