Samsung C&T, Samsung Group's de facto holding company, is contemplating when to raise 300 billion won in bond sales after abruptly pulling its planned bond issue last month.
Samsung C&T, which posted huge operating losses for the first quarter, seems to be in for a credit rating downgrade, so the company will be forced to pay higher interest rates on bonds.
Samsung C&T was scheduled to issue new bonds on April 15 and use the proceeds to redeem the older bonds, but it abruptly postponed its plan to sell 300 billion worth of bonds before carrying out demand forecasting. Instead, the company used cash to redeem old bonds coming to maturity.
Samsung C&T is said to have done so probably due to its huge operating losses for the first quarter. The company said on April 27 that its operating losses widened to 435 billion won in the first quarter.
Neither credit rating agencies nor analysts saw the writing on the wall. Local credit rating agency Korea Ratings (KR) said in its report, “Samsung C&T’s first-quarter earnings results are not commensurate with the company’s current credit rating. Its Q1 results fell far short of our previous expectations. We will consider revising down its credit rating.”
