Corporate downgrades reach three-year highs

Home > Business > Industry

print dictionary print

Corporate downgrades reach three-year highs

Korean companies suffered the most credit rating downgrades in three years this year, as lingering uncertainties from the U.S.-China trade war have weighed heavily on their performance, industry sources said Monday.

Since January, a total of 55 firms have faced credit rating downgrades in separate evaluations by three major credit appraisers here, compared with 37 firms from a year ago.

The credit rating agencies also eliminated 35 firms from their credit rating lists.

The numbers marked the highest number of rating cuts since 2016, when 91 firms suffered a decline in their rating grades.

“The downgrade was conducted mainly on the aggregated global supply and demand, as well as sagging domestic demand, increased competition and narrowed profit margins,” rating company NICE Investors Service said.

NICE Investors Service lowered ratings for 19 firms over the cited period, up from last year’s 13 companies.

Korea Ratings cut credit ratings for 22 firms, compared with last year’s 17. Korea Investors Service revised down ratings for 14 firms, also up from seven a year ago.

Hyundai Motor, Korea’s largest automaker, was marked down a notch from “AAA” to “AA+” by all three ratings firms. Kia Motors also suffered a credit rating downgrade, from “AA+” to “AA.”

Doosan Heavy Industries & Construction, the world’s leading desalination plant builder, and LG Display, a major flat panel maker, also saw their credit ratings fall by a notch.

Their credit rating downgrades came as Korea’s exports have suffered a continued slump since November last year.

According to the Ministry of Trade, Industry and Energy data, the country’s outbound shipments in November slipped 14.3 percent from a year earlier to extend their slump to a 12th consecutive month.

Late last week, the central bank estimated the Korean economy will grow 2 percent on year in 2019 and 2.3 percent next year.

The figures mark downward revisions from the 2.2 percent for 2019 and 2.5 percent for 2020 forecast in July.

Yonhap

More in Industry

Hanwha Techwin continues selling CCTV systems overseas

Popeyes to close all branches in Korea this month

Contract signed for Covid-19 vaccine

Teas the season

Empty Chairs at Empty Table

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now