S&P assigns SK Hynix notes BBB-

S&P said it assigned its BBB- long-term issue rating to the dollar-denominated senior unsecured notes that SK Hynix Inc. proposes to sell.

With about 51% of its consolidated total debt ranking higher, the agency said the parent’s unsecured debt creditors are exposed to material subordination risk. However, S&P said it believes the strong EBITDA generation of parent-level operating assets could mitigate the subordination risk.

“In the first nine months of 2020, 84%-90% of SK Hynix’s consolidated cash flows and earnings were from operating assets directly owned by the parent company. We, therefore, rate SK Hynix’s senior unsecured notes the same as the issuer credit rating on the company, despite the significant higher-ranking debt,” S&P said in a press release.

The company plans to use the proceeds mainly for general corporate purposes, including repaying borrowings and for capital expenditures.

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