OREANDA-NEWS. S&P Global Ratings today said that it has raised to 'AA-' from 'A+' its long-term corporate credit and debt ratings on Korea-based gas utilities company Korea Gas Corp. (KOGAS). At the same time, we raised our short-term rating on the company to 'A-1+' from 'A-1'. The outlook on the long-term corporate credit is stable.

The upgrade follows our upgrade of the Republic of Korea (AA/Stable/A-1+) (see "Republic of Korea Long-Term Sovereign Rating Raised To 'AA' With Stable Outlook; Short-Term Rating Affirmed At 'A-1+'," published Aug. 8, 2016).

The ratings on KOGAS reflect our opinion that there is an extremely high likelihood that the government will provide the company with timely and sufficient extraordinary support if it were to experience financial distress. KOGAS is the sole government-owned entity responsible for wholesale sales of natural gas in the domestic market in Korea.

The stable outlook on KOGAS reflects the stable outlook on our sovereign ratings on Korea and our expectation of a continuing extremely high likelihood of extraordinary support from the government of Korea in the event of financial distress at the company.

We could lower the ratings on the KOGAS if we lower our ratings on Korea. The ratings could come under pressure if KOGAS' policy role or its link to the government weakens significantly. We could also lower the ratings if we were to lower our assessment of the stand-alone credit profile (SACP) on the company by two notches to 'bb' from the current 'bbb-', but we see the likelihood of this as remote over the next 12 months.

We could raise the ratings if we raise our ratings on Korea. We could upgrade KOGAS if we view the company's link and role to the government of Korea as having strengthened. We could also raise the ratings on the company if we raise our assessment of the SACP on the company by four notches to 'a+' or higher from current 'bbb-', but we see this scenario as remote over the next 12 months.