Moody's rates Lotte bonds A3

Moody's Investors Service said it assigned an A3 rating to the renminbi-denominated bonds to be issued by Lotte Shopping Business Management (Hong Kong) Ltd. and guaranteed by the parent, Lotte Shopping Co. Ltd.

Moody's also said it affirmed Lotte Shopping's A3 issuer rating.

The outlook is stable.

The proceeds from the notes will be used for general corporate purposes.

The ratings mainly reflect Lotte Shopping's clear leadership position and the high-entry barriers in Korea's department-store industry, which has been resilient through the recent economic downturn, Moody's said.

The ratings also are underpinned by the growing contribution and diversification of the less volatile retail businesses, predominantly hypermarkets and supermarkets, which mitigate the sensitivity of department stores to volatile economic conditions, the agency said.

Such strengths are balanced by the company's moderate competitive position in the Korean hypermarket industry and a degree of execution and event risk, given its aggressive overseas expansion and appetite for acquisitions, Moody's said.

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