Fitch puts SK Telecom, SK Broadband on watch

Fitch Ratings said it placed SK Telecom Co., Ltd.'s long-term foreign- and local-currency issuer default ratings and senior unsecured rating of A on Rating Watch negative.

This follows the announcement by the creditors of Hynix Semiconductor Inc. (BB-/Watch positive) on Nov. 11 to select SK Telecom as the preferred bidder for a stake in Hynix, according to the agency.

Fitch placed SK Broadband Co. Ltd.'s long-term foreign- and local-currency issuer default ratings and senior unsecured rating of A- on Rating Watch negative.

"Fitch believes that SKT's credit profile will deteriorate after the potential acquisition as it will be heavily debt-funded. In addition, investing in the cyclical semiconductor industry will lead to a higher business risk profile while generating little meaningful synergies," Alvin Lim, an associate director at Fitch, said in a statement.

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