HMM's credit rating drops

Hyundai Merchant Marine (HMM) tasted a bitter credit downgrade due to enormous losses.

Korea Investors Service, Korea Ratings, and NICE Rating, the Korean big 3 credit-rating agencies, downgraded in unison HMM’s credit ratings to "A-" from "A" on February 25th.

The Korean-carrier also faced that its commercial paper rates was demoted to "A2-" from "A2". However, HMM’s credit rating outlook has been revised to “stable” from "negative" by the 3 agencies.

The credit rating companies understood that not only the profit-making ability of HMM has been weakened, but also the burden for financial affairs has been aggravated.

Indeed HMM has suffered slowed cargo traffic growth, heightened fuel costs, and a fast-increased fleet capacity since 2008 under the financial crisis.

Especially the poor results had been predicted because it was hard to recover the profitability for the liner sector and the huge loss for the bulk sector was growing fast last year.

However, HMM managed to procure cash liquidity through transfusions that the company received in a recapitalization of KRW 196.9 billion last December.

Consequently, the 3 credit rating agencies judged the carrier's financial flexibility as pretty good in view of the weakened industry market. < 김보람 기자 brkim@ksg.co.kr >