JoongAng Ilbo Faces Initial Default After Failing to Repay 22 Billion Won in Early Redemption Demands [Subtitle News]

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

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, we were processed for an initial bill default because we could not settle the payment due to a lack of funds in our deposit account, despite the creditor's presentation of the bill for payment on the same day."

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

Although there was time remaining until maturity, the creditor, Hanyang Securities, moved to collect the funds early due to an "event of default" triggered amid the recent liquidity crisis of the JoongAng Group.

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

As a default situation occurred at JTBC, the credit risk for the entire JoongAng Group increased. In the aftermath, JoongAng Ilbo's credit rating fell, leading Hanyang Securities to attempt an early recovery of the 22 billion won in JoongAng Ilbo CP.

JoongAng Ilbo was unable to repay the funds.

In a statement released on June 18 regarding Hanyang Securities' request for early repayment, JoongAng Ilbo said, "JoongAng Ilbo, which is currently pursuing a workout program with its main creditor bank, must maintain equity among all creditors," adding, "It is difficult to provide individual early repayment to a specific creditor before the maturity date."

Reported by Kim Minjeong | Video by Choi Gangsan | Graphics by Yook Dohyun | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.