This article was displayed on the ChosunBiz MoneyMove (MM) site at 10:45 a.m. on Jun. 18, 2026.
An event of default (EOD) has occurred on the 137 billion won public offering corporate bonds issued by JoongAng Ilbo, raising the difficulty of restructuring through creditor coordination. JoongAng Ilbo has said it will pursue a workout instead of court receivership, but with the EOD that began with privately placed bonds spreading to public bonds, some say it is now hard to rule out the possibility of corporate rehabilitation.
SLL JoongAng, the JoongAng Group's core content affiliate, currently faces a relatively lower likelihood of filing for rehabilitation than JoongAng Ilbo. However, with financial investors' (FI) capital recovery and the burden of redeeming convertible bonds (CB) intersecting, how the collateral rights held by FIs are handled is cited as a variable that will determine SLL JoongAng's course.
◇ Some say rehabilitation is more suitable to deal with public bondholders all at once
According to the investment banking (IB) industry on the 18th, Korea Ratings and NICE Investors Service downgraded JoongAng Ilbo's unsecured bond credit rating to "CCC" from "B-" the previous day and placed it on "negative watch." This came just two days after the rating was cut to "B-" from "BB+" on the 15th, when the company announced plans to pursue a workout.
The EOD on JoongAng Ilbo's public bonds stemmed from the acceleration of the 49th privately placed bonds. As JoongAng Ilbo's credit rating fell, the 49th private bonds were accelerated first, which in turn triggered acceleration on four tranches of public bonds, including the 43-2nd, 46th, 47th, and 51st.
The problem is that the involvement of public bonds has greatly expanded the range of stakeholders in the restructuring. JoongAng Ilbo has said it will proceed with a workout rather than corporate rehabilitation, and a workout is essentially a voluntary agreement with a bank lenders' council. If banks defer repayment of financial-sector liabilities or convert debt to equity, the Corporate Restructuring Promotion Act allows for management normalization without court rehabilitation.
However, public bondholders are not financial institutions, so they are not bound by a workout. Banks cannot automatically bind them. Therefore, separate from talks with the bank group, JoongAng Ilbo must persuade public bond investors to accept repayment deferrals or changes to terms.
To persuade creditors, the company must show the feasibility of repayment resources and self-rescue plans, but as major affiliates enter rehabilitation proceedings, group-level support cards that JoongAng Ilbo can use are also limited. That is because group holding companies and key affiliates such as JoongAng Holdings, JoongAng P&I, Contentree JoongAng, and Megabox JoongAng have all filed for commencement of rehabilitation.
An attorney and former judge well-versed in corporate rehabilitation said, "Bondholders have no obligation to consult with the bank group during a workout, but the story changes if the company enters rehabilitation," adding, "In corporate rehabilitation, all creditors' enforcement of rights is stayed, so if JoongAng Ilbo wants to adjust even the bondholders all at once, it is advantageous to enter rehabilitation." In other words, to first block public bondholders from exercising their rights, it is more appropriate to pursue corporate rehabilitation.
However, the legal community says JoongAng Ilbo has little choice but to leave corporate rehabilitation as a secondary option. The attorney said, "These days, even if a company enters rehabilitation, courts often respect corporate autonomy, such as not replacing the CEO, but there are still many companies that are uncomfortable with court oversight," adding, "External image is also likely one of the factors that makes filing for rehabilitation difficult."
◇ For SLL JoongAng, asset sales and negotiations with FIs are key
SLL JoongAng was excluded from the corporate rehabilitation list, but the situation is not one for complacency. According to Korea Ratings, SLL JoongAng's standalone liability ratio was 81.1%, and its borrowing fund dependence was 35.8%. Its own financial metrics are relatively sounder than other group affiliates, with standalone operating profit of 30.7 billion won and net profit of 26.9 billion won at the end of last year.
However, as the group-wide liquidity crisis intensified in earnest, SLL JoongAng's credit profile also deteriorated rapidly. On Jun. 9, Korea Ratings lowered SLL JoongAng's unsecured bond credit rating to "BBB-," and after major group affiliates filed for rehabilitation, it downgraded the rating again to "B." The CP and short-term bond ratings were also cut to "B-." Market-perceived uncertainty over principal and interest repayment has surged.
SLL JoongAng's biggest burden is FIs' recovery and refinancing. Praxis Capital Partner invested about 300 billion won in SLL JoongAng during a 2021 pre-IPO, and Tencent also injected about 100 billion won. Contentree JoongAng was scheduled to carry out an equity purchase of about 170 billion won on the 12th of this month, and repayment of about 121.5 billion won of SLL JoongAng's 17th convertible bonds is scheduled for the 30th of this month.
Because SLL JoongAng has not filed for corporate rehabilitation, FIs and lender groups are likely to pressure the company by demanding negotiations on asset sales, collateral right readjustments, and repayment schedule changes.
SLL JoongAng's content production capabilities, owned intellectual property, and its equity in Tving are cited within the group as core assets that can potentially be monetized. The key, however, is price. During the 2021 pre-IPO, SLL JoongAng's corporate value was estimated at more than 1 trillion won, but recent valuations in the media and content sectors have fallen sharply. Even Studio Dragon, the industry leader, has a market capitalization of only in the 700 billion won range.