Moody's stabilizes SK Telecom view

Moody's Investors Service said it changed SK Telecom Co., Ltd.'s outlook to stable from negative and affirmed its A3 issuer and senior unsecured ratings.

The outlook revision follows SK Telecom's announcement it will spin off its non-telecom investments, including its stake in SK Hynix Inc., into a new sister company. It plans to complete the spinoff by November.

"The rating affirmation and the outlook stabilization reflect our view that the negative impact of the proposed split will be manageable for SKT's credit quality. This is because the reduced financial flexibility resulting from the loss of the SK Hynix investment will be mitigated by a modest leverage decline and business profile improvement due to the spin-off of the highly competitive low-margin non-telecom subsidiaries," said Sean Hwang, a Moody's assistant vice president and analyst, in a press release.

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