S & P Pares S Korea, Malaysia Ratings

Standard & Poors today lowered its long-term foreign currency rating of the Republic of Korea and related entities to single-B-plus from triple-B-minus and its local currency rating to triple-B-minus from single-A-minus.

Additionally, Standard & Poors lowered its short-term foreign currency rating of the Republic to C from A-3 and its local currency rating to A-3 from A-2. All foreign and local currency ratings remain on Creditwatch with negative implications, where they were first placed November 25, 1997.

...Samsung, Hyundai scaled down

Standard & Poors said on Tuesday it had cut the long-term ratings of Samsung Electronics Co Ltd, Hyundai Motor Co,Hyundai Semiconductor America Inc and LG-Caltex Oil Corp to BB from BBB-minus.

 

Daewoo Corps long-term rating was lowered to BB-minus from BBB-minus. The short-term ratings of SK Corp, Samsung Electronics America Inc, and LG-Caltex were lowered to B from A-3.

The downgrades reflect a sharp increase in the companies financial risk as well as the diminishing ability of the Korean government to support them. All ratings remain on CreditWatch with negative implications.

...Eight banks lowered

Standard & Poors said on Tuesday it has cut local and foreign currency debt and counterparty ratings of eight South Korean banks.

They were Hanil Bank, Kookmin Bank, Korea Exchange Bank, Korea Long-Term Credit Bank, Korea First Bank, Korea French Merchant Bank, Pusan Bank and Shinhan Bank.

The Korean banks are heavily reliant on the Bank of Korea to help repay maturing foreign currency liabilities due to termination or decrease in credit lines from banks, it said.

Malaysia long-term negative

Standard & Poors said it has cut Malaysias long-term foreign currency rating to A from A-plus, its long term local currency rating to AA from AA-plus and saw long-term ratings as remaining negative.

The agency also lowered the countrys short-term foreign currency rating to A-1 from A-1-plus but it affirmed its short-term local currency rating of A-1-plus.

The cuts reflected stress from protracted private-sector restructuring as companies reduced high leverage and vulnerability to volatility in the financial markets, it said.

...3 cos downgraded

Standard and Poors said on Tuesday it had cut the ratings of three Malaysian corporations in response to the downgrade of the countrys foreign and local currency ratings.

S&P lowered its long-term foreign currency rating of Petroliam Nasional Berhad to A from A-plus, and its long-term local currency rating to AA from AA-plus. S&P also lowered the long-term foreign currency ratings on Telekom Malaysia Berhad and Tenaga Nasional Berhad to A from A-plus.