Yeocheon NCC credit rating downgraded to 'BBB+'; bond repayment condition triggered

Korea Ratings 6 month 12 day, downgraded Yeocheon NCC's unsecured corporate bond credit rating to 'BBB+(Stable)'. The previous rating was 'A-(Negative)'. The commercial paper credit rating was lowered from 'A2-' to 'A3+'.

A mandatory repayment condition has been triggered in relation to the corporate bonds. Korea Ratings said it would apply the condition to the unsecured corporate bonds. The company will disclose the details through a related public filing.

Korea Ratings 2022 diagnosed that weak performance has been prolonged since the second half of the year due to deteriorating conditions in the petrochemical industry. Last year, 11 there was a capital increase through a debt-to-equity conversion of shareholder loans in 3,000 hundred million won. Nevertheless, it assessed that the financial burden remains excessive relative to earnings-generating capacity.

Korea Investors Service pointed out that the financial stability indicators were inadequate for the rating level. It explained that the rating was downgraded on this basis. The rating adjustment was reflected in the credit rating report.

Yeocheon NCC plans to announce the downgrade and the triggering of the corporate bond terms through the relevant disclosure. Bondholders and investors should check the disclosure. If the company makes an additional disclosure, the detailed terms and schedule will be released.

The announcement date is 6 month 12 day. Korea Investors Service’s assessment is the official evaluation result concerning the company’s creditworthiness. Any relevant additional disclosures will be announced through the company and the credit rating report.