Korean Big 3 carriers’ credit rating turns red-light

National Information & Credit Evaluation Inc. (NICE), a Korean financial infrastructure group, downgraded the 3 major Korean liners credit ratings - Hanjin Shipping, Hyundai Merchant Marine (HMM) and STX PanOcean.

NICE pointed the finger of blame for these results on prolonged market depression, falling financial stability due to slowdowns in sales achievements, and negative industry watch.

Hanjin Shipping’s credit rating for corporate bonds was taken down from A to A- and its commercial paper (CP) also was reduced from A2 to A2-. NICE estimated the company's adaptability on fickle market conditions has declined because its debt ratio soared to 422% in September 2011. The main reasons for increases are raising funds through external loans for ship investment and a large net loss.

On the other hand, the other 2 carriers’ credit ratings remained the same at A, but the ranks dropped from ‘stable’ to ‘negative’. NICE evaluated HMM's financial stability will fall because the company ordered new ships in the second half of 2011.

A representative of NICE said, “In this year, most carriers will see falling financial stability and face poor money making prospects as last year,” and “the carriers will be burdened by ship investments.” He added, “On the container side, many carriers entered into partnerships but the possibility to solve the financial problems is slight.” < 김보람 기자 brkim@ksg.co.kr >