Hankyung, BS Hanyang Credit Rating Outlook Downgraded to 'Negative'

Korea Ratings downgraded the outlook for the unsecured bond rating of mid-sized construction company BS Hanyang from 'Stable' to 'Negative' on the 16th. However, the credit rating was maintained at 'BBB+'.

In a report released that day, Korea Ratings pointed to the expansion of financial burdens as the reason for the outlook change, stating, "Since 2021, investments related to energy projects such as Gwangyang Green Energy and Northeast Asia LNG Hub Terminal have increased, and loans to affiliates have risen for purposes such as securing construction volumes related to development projects."

Due to the assumption of affiliate borrowings and other debts, BS Hanyang's consolidated net borrowings as of the end of 2024 are confirmed to have increased by a staggering 437.4 billion KRW to 468.1 billion KRW compared to 30.7 billion KRW at the end of 2021.

Korea Ratings mentioned, "Considering the loan burden within affiliates related to development projects and the land investment burden for Gimpo Pungmu B1/B2, it is expected to take some time to improve the expanded borrowing burden despite performance improvements," adding, "Monitoring the recovery of investment assets is necessary."