Credit rating agencies lowered the credit rating of Homeplus in corporate rehabilitation procedures to 'D.'
According to investment bank (IB) sources on the 5th, Korea Credit Rating Agency (KCRA) again downgraded Homeplus's commercial paper and electronic short-term bond credit rating from 'A3-' to the default rating of D.
Korea Ratings said, "This reflects that Homeplus applied for the initiation of corporate rehabilitation procedures on the 4th and that the Seoul Rehabilitation Court decided to initiate the rehabilitation procedures, as well as the fact that timely repayment of financial debts has been compromised."
Korea Credit Rating Agency also lowered Homeplus's credit rating in light of the court's decision to initiate corporate rehabilitation procedures.
Korea Ratings reported, "The outstanding balance of Homeplus's commercial paper and short-term bond issuance totals 188 billion won, and the balance of purchase-only card payment-backed securities is also estimated to be about 400 billion won."
Earlier, Korea Ratings and Korea Credit Rating Agency downgraded Homeplus's credit rating from 'A3' to 'A3-' due to a decline in its profitability and excessive financial burdens compared to its cash-generating capacity.
Homeplus submitted a preemptive application for corporate rehabilitation procedures at around 12:03 a.m. the previous day, and the Seoul Rehabilitation Court decided to initiate the rehabilitation procedures just 11 hours after a representative hearing.
Additionally, the court issued a comprehensive permit decision for ongoing business operations. As a result, Homeplus can continue normal operations while undergoing rehabilitation procedures.
Homeplus explained, "The lowering of the credit rating may lead to issues in the future regarding short-term financing, so we applied for rehabilitation procedures to alleviate the burden of short-term debt repayment."