 |
[Alpha Biz=(Chicago) Reporter Kim Jisun] According to the investment banking industry (IB) on the 9th, the Korea Credit Rating and Nice Credit Rating recently lowered Hyosung Chemical's credit rating from "A" to "A- (stable)."
Poor performance and increased financial burdens are cited as major factors behind the downward trend in creditworthiness. This is due to massive losses in Vietnam's business, which has been heavily invested. Hyosung Chemical posted a total of 336.7 billion won in operating losses last year on a consolidated basis. Net borrowings rose from 903.4 billion won in 2018 to 2.52 trillion won at the end of March this year.
YEOCHUN NCC also saw its credit rating drop due to worsening financial soundness stemming from sluggish business conditions. The Korea Credit Rating lowered YEOCHUN NCC's credit rating from 'A + (negative)' to 'A (stable)' last month. YEOCHUN NCC is a petrochemical company established in 1999 by Hanwha Solution and DL Chemical in kind. Lotte Chemical's credit rating outlook was lowered from AA + (stable) to AA + (negative) in November last year.
Global credit rating agencies have also lowered the creditworthiness of local petrochemical companies. Standard & Poor's (S&P) lowered LG Chem's credit rating outlook from 'BBB+ (positive)' to 'BBB+ (stable)' last month.
The creditworthiness of the petrochemical industry is faltering because of the prolonged sluggish demand due to the global economic downturn.
Investor sentiment among institutional investors is also shrinking. Hyosung Chemical failed to avoid the full sale of its 120 billion won worth of corporate bonds in January. Yeocheon NCC, which expires KRW 60 billion in corporate bonds in September, is also expected to be difficult to issue a refinancing.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
