Moody's Withdraws Lotte Shopping Credit Rating

[Asia Economy Reporter Seungjin Lee] The international credit rating agency Moody's has withdrawn Lotte Shopping's corporate credit rating at the company's request.

On the 18th, a Lotte Shopping official stated, "Since there are no longer any plans to issue overseas bonds, the finance team judged that there is no need to receive Moody's credit rating service," adding, "We also decided this because we deemed the costs incurred during the evaluation process unnecessary."

He continued, "Regarding funding through domestic stock issuance, we are receiving normal credit ratings from Korean credit rating agencies, so there should be no issues."

On the same day, Moody's announced on its website, "For business reasons, we are withdrawing Lotte Shopping's 'Baa3' rating and 'negative' outlook."

Typically, a credit rating agency withdraws a credit rating when inaccurate financial information is provided, a significant event such as default or debt restructuring occurs, in cases of mergers and acquisitions, or upon the company's request.

Meanwhile, on the 21st of last month, Moody's downgraded Lotte Shopping's corporate credit rating outlook from 'stable' to 'negative' reflecting a decrease in operating profit and an increase in borrowings, while maintaining the credit rating at 'Baa3.'

At that time, Moody's explained, "Due to decreased profits, increased net borrowings, and changes in accounting standards, Lotte Shopping's adjusted net debt to EBITDA (earnings before interest, taxes, depreciation, and amortization) ratio was estimated at 6.1 times last year, up from 4.6 times the previous year."

They added, "The decrease in Lotte Shopping's operating profit was mainly due to one-time expenses such as taxes and depreciation in the second half of last year, as well as weakened performance in domestic large discount stores, supermarkets, and electronics specialty stores."

Moody's also assessed, "Lotte Shopping's department store business has better resilience against competition from the e-commerce sector compared to large discount stores, but it is relatively vulnerable to the impact of the spread of the novel coronavirus (COVID-19)."

This content was produced with the assistance of AI translation services.