JoongAng Ilbo Faces First Default Over 22 Billion Won Debt Repayment Failure

JoongAng Ilbo has announced that it has been processed for a first default after failing to meet a request for the early repayment of 22 billion won in commercial paper (CP).

According to the Financial Supervisory Service's Data Analysis, Retrieval and Transfer System (DART) on June 18, JoongAng Ilbo stated, "We have confirmed that as of June 18, our commercial paper was processed for a first default because we were unable to settle the payment due to insufficient funds, despite the creditor presenting the notes for payment on the same day."

The defaulted commercial paper is held by Hanyang Securities. The original maturity dates for the notes were December 7 of this year for 12 billion won, and March 30 of next year for 10 billion won.

Although the maturity dates had not yet arrived, Hanyang Securities moved to recover the funds early due to an "event of default" triggered by the recent liquidity crisis within the JoongAng Group.

An event of default is a contractual clause that allows a creditor to demand repayment before the maturity date if certain conditions, such as a credit rating downgrade, are met.

As the default situation at JTBC increased the overall credit risk of the JoongAng Group, the resulting downgrade in JoongAng Ilbo's credit rating led Hanyang Securities to attempt an early recovery of the 22 billion won in CP.

JoongAng Ilbo was unable to repay the funds.

In a statement released yesterday, JoongAng Ilbo addressed the early repayment request from Hanyang Securities, stating, "JoongAng Ilbo, which is currently pursuing a workout program with its main creditor bank, must maintain equity among all creditors." The company added, "It is difficult to provide individual early repayment to a specific creditor before the maturity date."

Reported by Kim Minjeong | Video by Choi Gang-san | Graphics by Yook Do-hyun | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.