Standard & Poor’s today affirmed its ‘B’ long-term rating on Hyundai Semiconductor America Inc. The rating was removed from Credit Watch, where it was placed on May 2, 2000. The outlook on the long-term rating Hyundai Semiconductor America’s rating is ultimately based on the credit quality of Korea-based Hyundai Electronics Industries Co. Ltd., the full owner of Hyundai Semiconductor America. Hyundai Semiconductor America’s rating is ultimately based on the credit quality of Korea-based Hyundai Electronics Industries Co. Ltd., the full owner of Hyundai Semiconductor America. Hyundai Investment Trust has announced various restructuring measures in recent months, and is expected to receive a capital injection of Korean Won (W) 900 billion from a consortium led by the American International Group. The restructuring measures will improve Hyundai Investment Trust’s financial standing in the near term. Meanwhile, Hyundai Electronics Industries’ stake in Hyundai Investment Trust will drop to less than 20% from the current 27.6% as a result of the capital injection. Hyundai Electronics Industries’ exposure to potential losses from Hyundai Investment Trust is capped at a maximum of W464 billion. This includes the initial W382 billion investment in Hyundai Investment Trust, as well as the escrow arrangement Hyundai Electronics Industries placed in the form of equity investments in unlisted subsidiaries, amounting to W82 billion. Potential losses, if any, should be manageable, with minimal impact on Hyundai Electronics Industries’ operational and financial standing. Standard & Poor’s has also taken into consideration Hyundai Electronics Industries’ strong commitment not to extend any further financial support to Hyundai Investment Trust beyond one-time shares placed in escrow. OUTLOOK: POSITIVE The rating on Hyundai Semiconductor America could be raised if Hyundai Electronics can demonstrate a sustainable improvement in its operating and financial performance, while reducing its debt burden.
– Standard & Poor’s today affirmed its ‘B’ long-term rating on Hyundai Semiconductor America Inc. The rating was removed from Credit Watch, where it was placed on May 2, 2000.
