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S&P cuts SK Telecom to A-
Standard & Poor's said it lowered its long-term corporate credit rating and senior unsecured debt ratings on SK Telecom Co. Ltd. to A- from A, following its acquisition of a major stake in Hynix Semiconductor Inc.
At the same time, the agency said it removed all ratings on SK Telecom from CreditWatch, where they were placed with negative implications on Nov. 14. The outlook on the long-term corporate credit rating is stable.
S&P said the downgrade follows SK Telecom's announcement that it completed its acquisition of a 21% stake in Hynix for KRW 3.4 trillion.
Because SK Telecom largely funded the acquisition with debt, the deal weakens the company's financial risk profile, the agency said. S&P said it estimates SK Telecom's ratio of debt to EBITDA after adjusting for the proportional consolidation of Hynix will increase to about 1.7x in 2012 from 1.3x in 2011.
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