[Edaily Marketin LEE GEON-EOM Reporter] Events of Default (EOD) have occurred in four tranches of corporate bonds previously issued by JoongAng Ilbo.

On the 16th, JoongAng Ilbo announced that events of default (EOD) had occurred on a total of four tranches—including the previously issued △43-2nd tranche (18 billion won), △46th tranche (34 billion won), △47th tranche (35 billion won), and △51st tranche (50 billion won)—amounting to 137 billion won in publicly offered corporate bonds. An EOD refers to a situation where the debtor fails to fulfill its contractual obligations, allowing the creditor to demand immediate repayment of principal and interest before maturity.

This EOD is in accordance with a special clause in the subscription agreement for the 49th series of bearer, unsecured private placement bonds, which was signed on February 9 of this year. The agreement includes a condition stipulating that the right to pay at maturity is forfeited if the corporate credit rating assigned by Korea Credit Rating Agency or Korea Ratings Corporation declines by one or more notches compared to the rating immediately prior to the signing of the agreement.

JoongAng Ilbo’s credit ratings have recently been downgraded in quick succession. On the 15th, Korea Ratings Corporation downgraded JoongAng Ilbo’s corporate credit rating from BB (under review for downgrade) to B (under review for downgrade), and Korea Ratings Corporation(034950)’s rating from BBB (stable) to B- (under review for downgrade).

This reflects the liquidity crisis affecting the entire JoongAng Group, which came to light following JTBC’s default on 20.6 billion won in debt. As the ratings have fallen by at least one notch from their levels at the time the contracts were signed, the conditions for an EOD have been met. The issuance interest rates for these bonds range from 6.2% to 7.1%.