This article was posted on the ChosunBiz MoneyMove (MM) site at 4:33 p.m. on Sept. 29, 2025.
HYBE recently drew attention inside and outside the industry by becoming the first major domestic entertainment company to receive an A+ (stable) credit rating from two credit rating agencies. HYBE has ample cash and is not currently in a position where it must raise funds immediately.
For that reason, some analysts say HYBE may have sought to proactively secure a high credit standing ahead of BTS's full-group activities to show the market that the company's position is solid despite owner-related risks.
According to the investment banking sector, Korea Ratings and another major domestic credit rating agency recently assigned HYBE a corporate credit rating (ICR) of A+ (stable). This is the first time HYBE itself, as well as a major entertainment company, has been evaluated for creditworthiness. The rating agencies said HYBE has secured a solid market position through a diversified artist portfolio.
Credit ratings are generally regarded as a preliminary step for issuing corporate bonds. To issue public bonds that attract institutional investor investment, a company must receive ratings of at least BBB- from two or more credit rating agencies. The A+ rating HYBE obtained is relatively high. The interest rate on recently issued A+ three-year corporate bonds has been set at around 3%.
But the market assesses that HYBE is unlikely to immediately issue corporate bonds. Its cash-like assets exceed total borrowings, allowing it to effectively operate with no net debt. HYBE's net cash stood at about 356.1 billion won at the end of June this year, up 262% from 98.3 billion won at the end of last year, and its debt ratio and dependence on borrowings were 61% and 22%, respectively. HYBE also said the credit rating was conducted as a preparatory measure to support its medium- to long-term management strategy.
So why did HYBE go ahead with a credit evaluation now? Experts say a credit rating can have the effect of externally enhancing a company's reputation.
HYBE has been plagued since last year by disputes surrounding its label ADOR, former CEO Min Hee-jin, and girl group NewJeans. Chairman Bang Si-hyuk is under police investigation on charges of fraudulent improper transactions, and the Seoul Regional Tax Service launched a tax probe into HYBE last month.
An industry source said, "Even if it is not actually for fundraising, companies sometimes obtain a credit rating and issue a minimal amount of corporate bonds as a move to showcase their solidity domestically and internationally," and added, "There is also the added benefit of potentially avoiding the risk of the financial authorities' discretionary appointment of auditors. The company likely took that into consideration."
Discretionary appointment means the authorities forcibly select a company's auditor (accounting firm). Reasons include the company being subject to inspection leading to auditor appointment measures, occurrences of embezzlement or breach of trust, or deterioration of financial condition. However, since 2020 the financial authorities have stipulated that companies with investment-grade ratings (BBB or higher) are excluded from discretionary appointment based on financial criteria.
Credit rating agencies say that if a company has decided to obtain a rating, now is the best time, largely thanks to the full-group return of BTS, which once accounted for 90% of total sales.
Korea Ratings said, "With all BTS members returning, the music sector is expected to see substantial top-line growth after 2026, and losses in the platform sector are expected to narrow." Korea Credit Rating also emphasized, "Meaningful profitability improvement may not be easy in the short term, but considering the expected scale expansion from BTS's return, the scale of profit generation will increase."