Hankyung Credit Rating, Downgrades HDC Hyundai Development Company Credit Rating... Reinstated for Negative Review

by Park Sunmi

Published 21 Apr.2022 18:22(KST)

Following Hanshin Rating, Hankyung Rating Also Downgrades HDC Hyundai Development Credit Rating

[Asia Economy Reporter Park Sun-mi] Korea Ratings announced on the 21st that it will downgrade the unsecured bond credit rating of HDC Hyundai Development Company from A+ to A.

Along with this, Korea Ratings also downgraded HDC Hyundai Development Company's commercial paper credit rating from A2+ to A2 and re-registered HDC Hyundai Development Company as a 'negative watch' subject.

Senior Researcher Sung Tae-kyung explained, "HDC Hyundai Development Company received an 8-month business suspension penalty related to the Gwangju Hakdong 4 District accident, and was pre-notified of a 1-year business suspension or deregistration penalty for the Gwangju Hwajeong I-Park accident," adding, "Brand reputation and order competitiveness are inevitably weakened, and increased safety management costs and rising financial burdens will also act as factors weighing on performance."

Regarding the re-registration as a negative watch subject, he added, "This reflects the results of administrative measures related to the Hwajeong accident, including whether liquidity burdens have increased and the company's ability to respond."

Previously, Korea Credit Rating also downgraded HDC Hyundai Development Company's unsecured bond credit rating from A+ to A and lowered the commercial paper credit rating from A2+ to A2.

Korea Credit Rating also mentioned that the downgrade background includes the business suspension penalty following the accident at the Gwangju Hwajeong I-Park new construction site, along with the spread of negative perceptions regarding the housing brand awareness and construction capabilities, which has caused disruptions in the sales progress of major planned projects and new order acquisitions.