Big firms suffer wide gap in domestic, foreign ratings

Published : Feb 22, 2017 - 09:41 Updated : Feb 22, 2017 - 09:41

South Korean credit appraisers award far more favorable ratings to large domestic corporations than Moody's Investors Service and other global players, a market tracker said Wednesday.

The country's three major ratings agencies -- NICE Investors Service, Korea Investors Service and Korea Ratings -- granted an average credit rating of AA+ to 51 local big businesses from 2014 to 2016, according to CEO Score.

The logos of South Korea's top 30 companies (Yonhap)

In contrast, Moody's Investors Service, Standard & Poor's and Fitch Ratings awarded an average rating of A to the companies over the cited period.

Credit ratings awarded by appraisers range from the highest AAA to the bankrupt state of D. Companies with higher ratings usually pay lower coupon rates on their bonds.

The domestic credit appraisers awarded AA+ to AAA ratings to 44 companies. The foreign players, however, gave their highest ratings of AA- to AA to only 12 state-invested corporations, while rating the remainder below AA-.

Lotte Shopping suffered the biggest gap in ratings between domestic and foreign rating agencies. The retailer received an AA+ rating from the domestic credit appraisers, while the foreign agencies all awarded a BBB- rating.

Among private companies, Samsung Fire & Marine Insurance Co. posted the narrowest difference as NICE Investors Service gave the highest AAA rating and S&P granted an AA- rating.

Samsung Electronics Co., the top-cap company in South Korea, obtained an A+ rating all from the three international ratings agencies last year, but the three players didn't rate the tech behemoth. (Yonhap)