Hyundai and Kia receive A- credit rating from S&P Global

Hyundai and Kia achieved an A- credit rating from S&P Global, an upgrade from their previous rating.

Hyundai Motor Group's Sonata The Edge models are displayed at the 2023 Seoul Mobility Show, previously known as the Seoul Motor Show. [HYUNDAI MOTOR GROUP]

Hyundai Motor and its affiliate Kia have achieved an A- from S&P Global, attaining the trifecta of A ratings from the top three credit agencies, the two automakers under Hyundai Motor Group announced Thursday.

The A- is an upgrade from the firms' previous rating of BBB+. They are currently rated A3 and A- by Moody's Ratings and Fitch Ratings, respectively.

S&P Global also projected a “stable” outlook for both companies.

The New-York based credit rating agency assigns ratings to countries and companies on 22 levels ranging from AAA to D. An A- rating, the seventh highest, indicates a strong credit profile with a low credit risk. Notably, only six automotive companies worldwide, including Toyota, BMW and Mercedes-Benz, have achieved an A rating on S&P Global's credit evaluation.

The agency attributed the upgrade to the Korean automakers' strengthened market position, which has driven substantial profit and cash flow. This positive trend began in 2021 and has continued for the past three years, fueled by increased market share, product improvements and favorable exchange rates.

S&P Global also projected that the automakers’ balanced portfolio, which includes both electric and hybrid vehicles, would position the company to effectively navigate the transition to electrification. The “stable” outlook reflects the expectation that the two automakers will continue to maintain strong profitability over the next 12-24 months.

“The upgrade to our global credit rating will likely lead to reduced capital financing costs. We will continue to prioritize financial stability and enhance our global competitiveness by adapting to market trends,” said a Hyundai Motor Group official.

BY YOON SEUNG-JIN [yoon.seungjin@joongang.co.kr]