No rate cuts on South Korea following Kim's death: S&P

Standard & Poor’s said there would be no immediate impact on South Korea’s A rating following the death of North Korean leader Kim Jong-il.

The comments came after South Korean assets took a hit as financial markets speculated about what might happen next in the isolated state, whose collapsing economy and bid to become a nuclear power pose major threats to northeast Asia.

“Our ratings on South Korea take into account temporary uncertainties associated with North Korean security risks as well contingent liabilities arising from a possible reunification of the North and South,” said a statement from S&P.

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It said that although the death of the North Korean leader had raised uncertainties, South Korea’s credit standing would be little changed in the event of a smooth leadership succession.

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But it warned that South Korea’s rating or outlook could be revised if the succession plan was not smoothly implemented or if there were other signs of political instability.

Earlier, Fitch Ratings said the death of North Korean leader Kim Jong-il did not merit a negative move on South Korea’s A+ rating. Last month, Fitch had revised its outlook on the rating to positive from stable, Fitch said on Monday.

Fitch said in a statement that it was too early to say that risks had materially increased.

Reuters