Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: RTev who wrote (27476)	7/28/1999 7:23:00 PM
From: Dan Spillane	Read Replies (2) \| Respond to of 74651

[Off-topic] Financial crisis "coming back"...? Wednesday July 28, 6:52 pm Eastern Time US rating firm warns of debt woes in Korea again NEW YORK, July 28 (Reuters) - South Korea may be headed for a new financial crisis if its financial reforms fail to restore the health of Korean companies, the U.S. rating agency Standard & Poor's warned on Wednesday, pointing to deepening debt woes at Daewoo Corp. S&P's warning about the wider Korean economy came just hours after the rating agency lowered the corporate debt rating of Daewoo Corp., which already faced severe debt problems in December 1997 as the Asian financial crisis spread around the globe. ''If you couple the Daewoo situation with the government's stalled efforts to unload Korea First and Seoul Banks, you get a clear picture of the reform efforts' loss of momentum,'' said analyst Wayne Gee at S&P's Financial Institutions Ratings Group. He added that in spite of improvements in the economy, ''Korea's financial system is still under duress because of massive asset quality problems.'' The debt problems of Daewoo and other Korean corporations are resurfacing a year and a half after they had been seemingly resolved in a global restructuring effort initiated in debt talks at the Federal Reserve Bank of New York on Christmas Eve, 1997. ''The fates of Korea's corporate and financial systems are intertwined... Daewoo's position in Korea's corporate system places many domestic financial institutions at risk -- both those with direct exposure and those with indirect exposure to the conglomerate,'' stressed Gee. He also warned ''the failure of Daewoo could potentially trigger another crisis for the Korean financial institutions.'' Gee's remarks came hours after S&P lowered the corporate debt rating of Daewoo Corp. to ''CCC,'' which signals substantial risk of default, from ''B-minus,'' which means the borrower is regarded as ''highly speculative.'' S&P did not rule out a further deterioration of Daewoo's debt problems and retained a negative outlook for the Korean company's debt rating. Daewoo Corp. is the auto, trading and construction arm of Daewoo Group, South Korea's second largest conglomerate that controls 22 separate affiliates.