Bangkok--10 Oct--Standard & Poor's
The repercussions of an as yet unconfirmed nuclear test by North Korea could be severe, although a lowering of the ratings on the Republic of Korea's (A/Stable/A-1) would not be certain, according to an article published today by Standard & Poor's titled "Nuclear Test By North Korea To Further Escalate Geopolitical Risks In Korea".
"Although the test was not confirmed by seismic observation or other measures, in the view of Standard & Poor's Ratings Services, a successful nuclear test would not by itself result in a downward revision of the sovereign ratings on Korea (A/Stable/A-1), or negatively affect the stable outlook attached to the country's ratings," Standard & Poor's credit analyst Takahira Ogawa of the Sovereign Ratings group said.
"This is because the prospect of a nuclear test leading to economic sanctions severe enough to hasten a collapse of the North Korean regime, or worse, spark a full-scale military conflict, are still remote."
"The goal is not to expose the regime to the risk of military reprisals," Mr. Ogawa added. "Indeed, it is, ultimately, not in North Korea's interests to raise the level of brinkmanship too far too quickly, as the more it escalates existing tensions the fewer bargaining cards it holds."
The report is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com . If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to [email protected] . Ratings information can also be found on Standard & Poor's public Web site at www.standardandpoors.com ; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
David Wargin, New York (1) 212-438-1579
[email protected]
Analyst Contact:
Takahira Ogawa, Singapore (65) 6239-6342