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Hyundai Card’s ratings unaffected by Fubon’s acquisition: Fitch

Hyundai Card headquarters in Youngdeungpo-gu, Seoul (Hyundai Card)
Hyundai Card headquarters in Youngdeungpo-gu, Seoul (Hyundai Card)

Global credit appraiser Fitch Ratings said Wednesday that Hyundai Card’s ratings will remain unchanged, even after Fubon Life Insurance and Fubon Commercial Bank‘s acquisition of 20 percent shares in the credit card operator.

According to Fitch, Hyundai Card will maintain its current rating as BBB (stable) because it will receive all necessary support from its parent company, Hyundai Motor Group.

Fitch Ratings said it expects Hyundai Motor Group to continue to have strong control over Hyundai Card’s management and board through the group affiliates.

Even after the stake acquisition by Fubon subsidiaries takes place, the group will still hold 77 percent of shares indirectly through Hyundai Commercial and Kia, Hyundai Card said. This will increase the group’s ownership compared to the previous 73 percent.

Fitch’s view is that unless Hyundai Motor Group sharply reduces its controlling stake in Hyundai Card, the credit card operator will not see any decrease in credit ratings and its plan to undertake an IPO will be back on track.

Market insiders, on the other hand, cast a gloomy outlook on Hyundai Card’s IPO initially planned for this year after the stake acquisition announcement last week. They said since the global private equity investors sold their 24 percent of shares to Hyundai Commercial and Fubon subsidiaries for an exit, it signals that shareholders are pessimistic about the credit card operator’s market debut in Korea.

By Byun Hye-jin (hyejin2@heraldcorp.com)
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