[Edaily Marketin KIM YEON-SEO Reporter] In the first half of this year’s regular credit ratings by credit rating agencies, the creditworthiness of major conglomerates showed a stark contrast between winners and losers. Ratings diverged sharply depending on the business conditions of the sectors in which each group operates and their financial strength.

According to the credit rating industry on the 10th, the results of the first-half regular ratings by the three major domestic credit rating agencies—Korea Ratings, Korea Credit Rating, and NICE Credit Rating—showed that Jungang Group faced a sharp increase in credit risk as liquidity concerns across its affiliates materialized, while Lotte Group also saw growing downward pressure due to continued poor performance at its major affiliates.

In contrast, HD Hyundai, LS, and Daewoo Kiwoom Group, among others, saw their credit ratings trend upward, driven by improved performance in their core businesses and restored financial stability.

Long-term corporate bond credit ratings are classified into investment grade (AAA–BBB–) and speculative grade (BB+–D) based on the issuer’s ability to repay principal and interest. Ratings of AA or higher are classified as high-quality bonds with excellent repayment capacity, while A and BBB ratings are investment-grade bonds subject to economic fluctuation risks. Ratings of BB or lower are speculative grade, and a D rating indicates default.

Joongang Group: Liquidity Concerns Become Reality

The most notable downgrade in the credit rating market during the first half of this year involved the Joongang Group. Following JTBC’s failure to repay its securitized loans in June, financial risks across the entire affiliate network rapidly materialized. Previously, JTBC had defaulted on securitized loans totaling 20.6 billion won, including 5.6 billion won from Mir J and 15 billion won from Jeil TBC J.

Subsequently, credit rating agencies successively downgraded the credit ratings of JoongAng Group affiliates to “Default” (D). Korea Ratings downgraded the credit ratings of JoongAng Ilbo, Contentsree JoongAng, and Megabox JoongAng to D. Korea Ratings also downgraded JTBC’s credit rating to D. This effectively reflects concerns about the group’s overall liquidity management capabilities, going beyond the poor individual performance of its affiliates.

SLL JoongAng, another JoongAng Group affiliate, was also unable to avoid the fallout. SLL JoongAng’s credit rating was downgraded from “BBB (Stable)” to “B- (Under Review for Downgrade).” With its credit rating falling from investment grade to speculative grade in a short period, observers note that the spillover of financial risks across the group has become a reality.

Lotte Also Faces Downward Pressure… Burdens from Petrochemicals and Retail Compound

Lotte Group also faced notable downward pressure in the first-half credit assessments. As the prolonged slump in earnings at its core affiliate, Lotte Chemical, continues, red flags have been raised regarding the credit outlook for major affiliates such as Korea Seven and Lotte Corporation.

Although Lotte Chemical maintained its “AA-” credit rating, its outlook was revised from “stable” to “negative.” This reflects the assessment that, while business restructuring is expected to partially reduce operating losses, it will be difficult to alleviate financial burdens due to continued poor performance. Although Lotte Chemical posted a consolidated operating profit of 73.5 billion won in the first quarter of this year, driven by rising oil prices and positive lag effects, credit rating agencies expressed concern that performance could deteriorate again in the medium to long term.

Pressures from the retail and real estate affiliates also persist. Korea Seven (A0)’s credit rating outlook was changed from “Stable” to “Negative.” Lotte Corporation’s (AA-) credit rating outlook was also changed from “Stable” to “Negative.” With the slump in the petrochemical sector overlapping with profitability pressures in the retail and real estate divisions, downward risks to the group’s overall creditworthiness appear to be increasing.

HD Hyundai Upgraded on Strong Performance in Shipbuilding and Power Equipment

In contrast, the HD Hyundai Group showed a clear trend of credit improvement in the first-half ratings. The credit ratings of major affiliates—including HD Hyundai, HD Hyundai Heavy Industries, and HD Hyundai Electric—were all upgraded.

The three credit rating agencies upgraded the credit ratings of HD Hyundai, HD Hyundai Electric, and HD Hyundai Heavy Industries from “A+ (Positive)” to “AA- (Stable).” This reflects a combination of improved financial stability across the holding company and its affiliates, coupled with notable earnings growth in the shipbuilding and power equipment sectors—the group’s core businesses.

HD Hyundai’s debt burden is trending downward, driven by an increase in net cash in its shipbuilding and power equipment divisions. Rising dividend income and financial flexibility derived from its equity holdings are also supporting the company’s financial stability.

HD Hyundai Heavy Industries was assessed to have strengthened its market dominance through synergies from its merger with HD Hyundai Mipo. Analysts note that, given its order backlog consisting primarily of high-margin projects, there is a high likelihood that strong profitability will be sustained in the short to medium term.

HD Hyundai Electric has also been evaluated as having expanded its business base and improved operating profitability, driven by growing demand for power equipment, particularly in North America.

Park Hyun-jun, a senior researcher at NICE Ratings, explained the rationale behind the rating upgrade, stating, “The group’s operating performance has improved significantly, and excellent operating profitability is expected to be maintained in the medium to short term, particularly in the shipbuilding and power equipment sectors.”

LS and Daewoo Kiwoom Also Showing Upward Momentum

LS Group is another leading group for which expectations of a credit rating upgrade have grown. The credit rating outlooks for LS Cable (A+) and LS (A+) were revised upward from “Stable” to “Positive.” This assessment is based on the expectation that profitability will improve as sales of high-value-added products—such as ultra-high-voltage power lines and subsea cables—increase amid continued favorable market conditions driven by expanding global power demand.

Credit rating agencies assessed that LS Cable’s revenue is growing rapidly, driven by the expansion of downstream markets and an increasing share of high-value-added products. LS Cable’s consolidated order backlog expanded from 2.7 trillion won at the end of 2021 to 8.5 trillion won as of the end of March 2026.

Lee Ye-chan, an analyst at Korea Ratings, stated, “Amid a favorable demand environment, the smooth reflection of selling prices will offset cost pressures, while the volume of orders focused on high-value-added products will translate into revenue, further enhancing profit-generating capacity compared to previous levels.”

The Daewoo Kiwoom Group also joined the upward trend. The three credit rating agencies upgraded Kiwoom Securities’ credit rating from ‘AA-’ to ‘AA’ and changed the outlook from ‘Positive’ to ‘Stable.’ This reflects the company’s record-high operating performance, driven by improved results in its asset management and investment banking (IB) divisions, which are built on its online stock brokerage business.

Kiwoom Capital’s credit rating also rose from “A-” to “A,” and Kiwoom F&I was upgraded from “A- (Positive)” to “A (Stable).”

The first-half credit rating results from the three credit rating agencies revealed creditworthiness differentiation that cannot be fully explained by overall figures alone. The assessment is that there were significant differences between groups depending on business conditions and financial strength.

An official in the financial investment industry stated, “For groups with heavy financial burdens, even a single liquidity event caused credit risk to expand rapidly; conversely, groups whose core businesses demonstrated structural growth potential and cash-generating capacity continued to see improvements in their creditworthiness.” The official added, “In the second half of the year, creditworthiness polarization among groups is expected to continue, depending on the sustainability of the industry recovery, the ability to manage debt maturities, and the capacity to support affiliates.”