Below is a summary of South Korea’s current sovereign credit ratings (as of November 2025) and what “one notch lower” would look like for each major rating agency.
(“One notch” refers to the long-term foreign-currency rating; outlook is assumed unchanged.)
|
Agency
|
Current Rating
|
One Notch Lower
|
Meaning (in simple terms)
|
|---|---|---|---|
|
S&P Global
|
AA
|
AA–
|
Still very strong,
but signals growing fiscal/political risks
|
|
Moody’s
|
Aa2
|
Aa3
|
Still investment-grade,
but drops one step from the top tier
|
|
Fitch
|
AA–
|
A+
|
Lowest investment-grade tier;
medium-term pressure reflected
|
|
Impact Area
|
Likely Effect
|
|---|---|
|
Borrowing Cost
|
Government bond yields +0.2~0.5%
(e.g., 10-yr KTB from 3.2% → 3.5–3.7%)
|
|
Foreign Investors
|
Increased selling of Korean stocks & bonds
(especially if Fitch falls to A+)
|
|
KRW Exchange Rate
|
Won weakens by ₩20–50 vs. USD in the short term
|
|
Corporate Debt
|
Large-cap bond spreads widen by 30–70 basis points
|
but it hurts investor confidence, raises funding costs, and speeds up foreign capital exit.
11/12/2025 1:09 PM
Contributor : Sharon Liu Fau
sharonliufau@gmail.com
