Hyundai Genesis Forum banner
1 - 1 of 1 Posts

·
The Dude
Joined
·
2,120 Posts
Discussion Starter · #1 ·
Jan. 15 (Bloomberg) -- Hyundai Motor Co., South Korea’s largest automaker, and affiliate Kia Motors Corp. fell in Seoul trading after Fitch Ratings cut their debt to junk levels on waning global auto sales.

Hyundai plunged 10 percent, the most in seven weeks, to close at 43,000 won. Kia slumped 11 percent to 6,950 won, while the benchmark Kospi index dropped 6 percent. Fitch lowered both automakers’ ratings one rank to BB+, the highest non-investment grade.

Fitch also cut Honda Motor Co.’s rating yesterday as it forecast “unprecedented challenges” for the global auto industry. Demand in the U.S. and Western Europe is contracting more quickly than Fitch expected. The slowdown is also spreading into emerging markets, where Hyundai and Kia had been boosting sales, the ratings company said.

“Credit downgrades could weaken sentiment,” Goldman Sachs Group Inc. analysts including Rajeev Das said in a note released today. The ratings cut also “implies a more difficult capital raising environment for Hyundai and Kia,” which could raise financing costs and damp profit.

Automakers are cutting jobs and curtailing output as recessions in Europe, Japan and the U.S. hurt car sales. Industrywide sales slumped to a 16-year low in the U.S. last year because of the global slowdown, tighter credit and rising job insecurity.

Separately, Standard & Poor’s today lowered its outlook on Hyundai, Kia and part-making affiliate Hyundai Mobis Co. to “negative” from “stable,” reflecting deterioration in global automobile markets and growing uncertainty about the economy, the credit rating company said in a statement. Standard & Poor’s affirmed its BBB- rating, its lowest investment grade, for the companies’ long-term ratings.

Hyundai plans to cut first-quarter global production 17 percent from a year earlier on the demand slump, Edaily reported today, citing industry officials it didn’t name. Spokeswoman Meeyoung Song declined to comment on the report.

Honda, Japan’s second-biggest automaker, fell 4.3 percent to close at 1,862 yen in Tokyo. Fitch cut its rating on the company to A, it fifth lowest investment grade, from A+. The ratings company said that the outlook for Honda, Kia and Hyundai is negative.

Toyota Motor Corp., the biggest Japanese carmaker, fell 2.7 percent. Nissan Motor Co., ranked third, slipped 3.4 percent. Moody’s Investors Service said yesterday it was reviewing its A3 rating on Nissan’s debt.
 
1 - 1 of 1 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top