Moody's assigns E Mart Ba1

Moody's Investors Service said it assigned a Ba1 corporate family rating to E Mart Inc. and withdrew the company's Baa3 issuer rating. The outlook remains negative.

"The rating action was driven by a significant weakening in E Mart's profitability and financial leverage in 2019, and our expectation that these factors will not improve meaningfully over the next one to two years," said Wan Hee Yoo, a Moody's vice president and senior credit officer, in a press release. "The company faces ongoing challenges in its core hypermarket business and its capital spending remains elevated," adds Yoo.

Moody's estimates E Mart's adjusted debt/EBITDA increased to around 6.1x in 2019 from 4.2x in 2018, because of a significant weakening in earnings and higher adjusted debt.

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