Samsung Electronics Co.’s credit rating has been upgraded to the same level as the South Korean government by Moody’s Investors Service, highlighting the credit market’s confidence in the technology giant.
(Bloomberg) — Samsung Electronics Co.’s credit rating has been upgraded to the same level as the South Korean government by Moody’s Investors Service, highlighting the credit market’s confidence in the technology giant.
The senior unsecured debt rating of Korea’s biggest company was raised to Aa2, the third highest level, from Aa3, Moody’s said in a statement Thursday. The rating firm cited expectations that the Suwon-based company will maintain solid earnings over the foreseeable future and strong business and financial profile through business cycles. Moody’s also pointed to Samsung’s “exceptionally healthy balance sheet.”
Samsung Electronics has a massive presence in Asia’s fourth-biggest economy, with its revenue equivalent to around 13.5% of Korea’s gross domestic product in 2021, according to Bloomberg calculations. It’s not the only company with the same credit score as the government: Toyota Motor Corp. and the Japanese government both have an A1 rating from Moody’s, the fifth-highest grade.
Read more: How Samsung Patriarch Helped Build Korea’s Tech-Driven Economy
While the global memory chip industry will likely undergo a significant cyclical downturn over the next several quarters, Samsung will remain solidly profitable, according to Moody’s. The company had a net cash position of 108 trillion won ($80 billion) as of June 30, while the total amount of public bonds and loans outstanding was $430 million, according to data compiled by Bloomberg.
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