[Edaily Marketin LEE GEON-EOM Reporter] Korea Ratings Corporation announced on the 27th that it has maintained SK Advanced’s senior unsecured bond credit rating at BBB and its commercial paper rating at A3, while changing the outlook from “Stable” to “Under Review for an Upgrade.”
A “review for upgrade” designation indicates a high likelihood of a credit rating upgrade in the near term. This decision is attributed to the fact that, following the decision by parent company SKGas(018670)to merge with SK Advanced through an absorption merger, the bonds issued by SK Advanced are expected to be transferred to SKGas—which possesses a strong credit profile—should the merger proceed.
Previously, SKGas held a board meeting the day before and approved the proposal for a merger by absorption with SK Advanced. The merger date is set for November 4, 2026, and the merger will proceed as a 1:0 merger without a capital increase, meaning no new shares will be issued. In accordance with the preconditions stipulated in the merger agreement, SKGas plans to acquire all of SK Advanced’s outstanding shares by the merger date.
Kim Dae-eun, an analyst at Han Shin Rating, stated, “If the merger proceeds as planned, the unsecured bonds and commercial paper issued by SK Advanced are expected to be transferred to SKGas,” adding, “Considering the creditworthiness of the surviving company, SKGas, we are placing SK Advanced’s unsecured bonds and commercial paper on review for an upgrade.”
SK Advanced’s standalone revenue decreased from 688.1 billion won in 2024 to 610.1 billion won in 2025. Although the company posted operating losses of 116.1 billion won in 2024 and 140.0 billion won in 2025, it returned to profitability in the first half of this year with an operating profit of 40.4 billion won.
SK Advanced’s total debt on a standalone basis decreased from 631.2 billion won at the end of 2024 to 475.8 billion won at the end of June 2026. The debt-to-equity ratio also improved, falling from 407.4% at the end of 2025 to 338.3% at the end of June 2026.
Analyst Kim pointed out, “It is necessary to monitor the progress of upcoming merger procedures, including the announcement of SKGas’s small-scale merger and the period for submitting notices of opposition to the merger, as well as the filing of objections by creditors.”
