Broadcaster defaults on 20.6 billion won in securitized loans, triggering credit rating downgrades
JTBC said it would mobilize every available resource to resolve its liquidity crisis after failing to repay 20.6 billion won (about $13.5 million) in securitized loans on time, a default that prompted a sharp downgrade of its credit ratings.
In a statement released Friday, the broadcaster said "a payment default on some bonds occurred today" and pledged to do its utmost to address the situation.
NICE Credit Rating downgraded JTBC's unsecured bond rating to CCC from BBB with a negative outlook on Friday. Short-term ratings for its commercial paper and electronic short-term bonds were also cut to C from A3.
The downgrades followed JTBC's failure to repay principal and interest on securitized loans on schedule. NICE said the broadcaster had defaulted on a total of 20.6 billion won — 5.6 billion won owed by Mir Second and 15 billion won owed by Jeil TVCJ Second — and assessed that its liquidity risk had risen sharply as a result.
Korea Ratings also cut JTBC's rating to BB with a negative review from BBB with a negative outlook, and lowered its commercial paper and electronic short-term bond ratings to B with a negative review from A3. Credit ratings for JoongAng Ilbo and SLL JoongAng were also downgraded to BB+.
Korea Ratings said financial risks had spread across the broader group and that liquidity uncertainty had grown. "With the financial stability of the group as a whole deteriorating, further credit deterioration at individual affiliates could amplify the refinancing risk on securitized instruments," it said.
JTBC said it had already been drawing on every available tool to overcome the liquidity crisis, including entering emergency management mode to improve operational efficiency.
The broadcaster attributed the default to a sharp deterioration in operating conditions — particularly the rapid contraction of the TV advertising market as the media landscape shifts toward digital platforms and over-the-top streaming services. JTBC promised to take a responsible approach to resolving the situation quickly, saying it would "use every internal and external means available and do its utmost."
JTBC said news programming, major sports broadcasts and all other content production and transmission would continue to operate normally.
balme@heraldcorp.com
