The outlooks for ratings of other petrochemical producers such as Lotte Chemical Corp., Yeochun NCC Co.(YNCC), SKC Ltd., SK Advanced and Hyosung Chemical Corp.are negative.“The oversupply is prolonged due to China’s production capacity expansion,” said Kim Hoseop, chief analyst at Korea Investors Service, an affiliate of Moody’s Corp.“The petrochemical industry must reduce financial risks through business reorganization and restructuring to ease downward pressure on credit ratings.”INSUFFICIENT GOVERNMENT SUPPORTIt is unclear whether the government’s steps to support the industry will revive the sector, industry sources said.
South Korea’s petrochemical producers are set to issue corporate bonds to take advantage of ample liquidity at the beginning of the year amid an industry downturn.SK Incheon Petrochem Co., wholly owned by the country’s top energy company SK Innovation Co., plans to hold a bookbuilding on Tuesday to sell 150 billion won ($102.5 million) in bonds with maturities of two, three and five-year, investment banking industry sources said.
SK Incheon aims to increase the issuance to up to 300 billion won if demand is strong, according to the sources.LG Chem Ltd., South Korea’s largest petrochemical manufacturer, is scheduled to hold a bookbuilding on Friday to raise 300 billion won through bond sales for rollovers.
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