Virus credit negative for Korean transportation firms: Moody's

SEOUL, March 11 (Yonhap) -- Moody's Investors Service said Wednesday the spread of the coronavirus in South Korea is credit negative for its rated transportation companies amid declining traffic volumes.

The extent of the virus' adverse impact on the transportation industry will depend on the duration of disruptions and evolving public sentiment, Moody's said in a statement.

"Given the spread of the coronavirus, people in Korea will be less likely to commute and go out for social and business gatherings, thereby lowering traffic volumes and in turn reducing transportation companies' earnings," Moody's Vice President and Senior Credit Officer Mic Kang said in a report.

The volume of traffic on Korea Railroad Corp.'s high-speed railways and on Korea Expressway Corp.'s toll roads has plunged by 20-30 percent and 20 percent, respectively, on average since mid-February this year compared with the same period of last year, it said.

Moody's holds an Aa2 stable rating for both Korail and KEC.

The credit rating agency expected traffic volumes on high-speed railways and toll roads could fall further if the coronavirus prolongs across the globe without being contained.

South Korea has reported 7,755 confirmed COVID-19 cases and 60 deaths as of Wednesday.

kyongae.choi@yna.co.kr
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