Hyundai Motor Company and Kia Credit Rating Upgraded to A-

Global credit rating agency Standard & Poor's (S&P) announced on the 22nd that it has upgraded the credit ratings of Hyundai Motor Company and Kia from ‘BBB+’ to ‘A-’. The credit rating outlook was presented as stable.

With this, Hyundai Motor Company and Kia have received an A- credit rating from the world's top three credit rating agencies this year. Earlier, Moody's and Fitch upgraded the credit ratings of the two companies to A3 and A-, respectively, in February this year. This indicates that their product and brand competitiveness, profitability, financial soundness, and market position are highly evaluated worldwide.

Hyundai Motor Company and Kia headquarters buildings in Yangjae-dong, Seoul. Photo by Jinhyung Kang aymsdream@

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S&P evaluates the creditworthiness of countries or companies by dividing ratings into 22 levels from AAA to D. The ‘A-’ rating, the seventh highest credit rating, signifies a sound credit status with a significantly low credit risk. Among global automakers, only six companies including Hyundai Motor Company, Kia, Toyota, Mercedes-Benz, BMW, and Honda have received an A rating.

S&P explained, "The upgrade decision was made considering the strong profitability and cash flow generation capability based on the continuously improving market position," adding, "The improvement in product mix, increase in market share in key markets, and favorable exchange rates have also positively contributed to profitability over the past three years." The stable outlook reflects the view that strong profitability will be maintained for the next one to two years.

The company stated, "With this rating upgrade, we expect an increase in global market credibility and a reduction in financing costs."

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