South Korean telco SK Telecom has proposed a US$3bn global medium-term notes programme, its second programme in weeks as the company looks to reduce its debt.
The operator’s leverage was high and the new notes will most likely be used to refinance its…
South Korean telco SK Telecom has proposed a US$3bn global medium-term notes programme, its second programme in weeks as the company looks to reduce its debt.
The operator’s leverage was high and the new notes will most likely be used to refinance its debt rather than for incremental debt raising, according to rating agency Moody’s who assigned it a (P)A3 rating today.
“The notes, along with the Y70bn [US$889m] Tokyo pro-bond programme that the company registered on 11 October, will give it much more flexibility in coordinating its financing arrangements,” said Yoshio Takahashi, Moody’s lead analyst for SK Telecom. According to IFR Barclays was the arranger of the pro-bond programme.
SK Telecom has over 50% share of the Korean wireless market and a growing fixed-line business through its subsidiary SK Hynix. However the primarily debt-funded acquisition of a 21% stake in the subsidiary has weakened the company’s financial profile, according to Moody’s.
Fitch gave the medium-term notes an ‘A-’ rating today, the same level as the company’s issuer default rating.
Earlier this month, SK Telecom sold 24 million shares of POSCO, a Korean steelmaker, for KRW438 bn (US$394m) as part of its plan to reduce leverage.
