A growing number of Korean companies have seen their credit ratings downgraded this year due to a protracted economic slowdown and lingering external uncertainties, industry data showed Wednesday.
Three major Korean credit raters -- Nice Investors Services Co., Korea Ratings Co., and Korea Investors Service -- lowered their credit ratings on 57 local firms through Oct. 15 this year, according to the data.
Although the appraisers upgraded ratings on 80 companies over the cited period, the up-to-down ratio, which divides the number of gainers to losers, has decreased significantly over the past two years, market watchers said.
While the up-to-down ratio at end-December of 2010 and 2011 reported 3.5 times and 2.9 times, respectively, the figure stood at 1.4 times in mid-October this year, the data showed.
The fall in the index implies the number of companies suffering ratings downgrades increased at faster pace in comparison with firms experiencing upgrades.
"The downgrade is attributed to the prolonged fiscal crisis in the eurozone, as well as sluggish economic recovery in the U.S. and China," said Jung Kwang-ho, an official from Nice Investors Services.
While companies in the top bracket AAA saw their sales increase 3.2 percent on-year in the first half of 2012, those under the lower BBB group held the comparable rate of 0.5 percent, implying an widening earnings gap among local firms.
The rating on Woongjin Holdings Co. plunged from A- to the second-lowest grade D after it filed for court receivership on Sept. 26, when its affiliate Kukdong Engineering & Construction Co. defaulted on promissory notes worth 15 billion won ($13 million).
Doosan Engineering & Construction Co. also saw its credit rating edge down one notch to BBB+ from A- on falling property prices in the country, according to the data. (Yonhap)
Three major Korean credit raters -- Nice Investors Services Co., Korea Ratings Co., and Korea Investors Service -- lowered their credit ratings on 57 local firms through Oct. 15 this year, according to the data.
Although the appraisers upgraded ratings on 80 companies over the cited period, the up-to-down ratio, which divides the number of gainers to losers, has decreased significantly over the past two years, market watchers said.
While the up-to-down ratio at end-December of 2010 and 2011 reported 3.5 times and 2.9 times, respectively, the figure stood at 1.4 times in mid-October this year, the data showed.
The fall in the index implies the number of companies suffering ratings downgrades increased at faster pace in comparison with firms experiencing upgrades.
"The downgrade is attributed to the prolonged fiscal crisis in the eurozone, as well as sluggish economic recovery in the U.S. and China," said Jung Kwang-ho, an official from Nice Investors Services.
While companies in the top bracket AAA saw their sales increase 3.2 percent on-year in the first half of 2012, those under the lower BBB group held the comparable rate of 0.5 percent, implying an widening earnings gap among local firms.
The rating on Woongjin Holdings Co. plunged from A- to the second-lowest grade D after it filed for court receivership on Sept. 26, when its affiliate Kukdong Engineering & Construction Co. defaulted on promissory notes worth 15 billion won ($13 million).
Doosan Engineering & Construction Co. also saw its credit rating edge down one notch to BBB+ from A- on falling property prices in the country, according to the data. (Yonhap)
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