Fitch ups Hanaro Telecom from junk

Fitch Ratings said it upgraded Hanaro Telecom's long-term foreign-currency issuer default rating to BBB+ from BB following the recent approval of SK Telecom's acquisition, yielding it a controlling stake of 43.6%. The Rating Watch positive has been resolved.

A positive outlook was assigned.

The upgrade reflects Fitch's view that the deal will significantly reduce Hanaro's default risk. The agency said it believes SK Telecom would not allow Hanaro to fall into financial difficulty. Still, a two-notch differential between Hanaro's BBB+ rating and SK's A rating reflects the absence of legal ties between the two entities.

The acquisition will allow SK Telecom to compete with its biggest competitor on a more equal footing in the new triple- and quadruple-play bundled service environment, the agency said, and potentially provide long-term fiscal benefits and access to markets that SK Telecom could not otherwise access.

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