South Korean telco SK Telecom plans to issue 5.5-year unsecured bonds, to be drawn from the US$3bn global medium-term notes programme it announced earlier this month.
“Moody’s expects SK Telecom to use the proceeds from this issuance to refinance its…
South Korean telco SK Telecom plans to issue 5.5-year unsecured bonds, to be drawn from the US$3bn global medium-term notes programme it announced earlier this month.
“Moody’s expects SK Telecom to use the proceeds from this issuance to refinance its outstanding debt and term out its debt maturity profile at a lower interest rate, which would be a credit positive,” said Yoshio Takahashi, assistant VP and analyst at Moody’s, which today assigned an A3 rating to the new bonds.
Standard & Poor’s assigned an A- rating to the unsecured notes, due to “the company’s leading position in Korea’s wireless telecommunications market; its “strong” business risk profile, backed by strong, stable operating cash flow; and its “modest” financial risk profile,” the rating agency said in a statement today.
SK Telecom’s US$3bn notes programme was the second programme it registered in weeks, as the company is looking to reduce its high levels of debt.
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.
SK Telecom recently sold 24 million shares of POSCO, a Korean steelmaker, for KRW438 bn (US$394m) as part of its plan to reduce leverage.
