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Distressed corporate debts in Korea

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  • Distressed corporate debts in Korea
  • Kwon, Jae-Jung; Nam, Joo-Ha
  • Korea Institute for International Economic Policy


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Title Distressed corporate debts in Korea
Similar Titles
Material Type Reports
Author(English)

Kwon, Jae-Jung; Nam, Joo-Ha

Publisher

Seoul:Korea Institute for International Economic Policy

Date 1999-04
Series Title; No KIEP Working Paper / 99-11
ISBN 89-322-4054-x; 89-322-4026-4(세트)
Pages 41
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Financial Policy
Industry and Technology < Entrepreneurship
Holding Korea Institute for International Economic Policy

Abstract

This paper undertakes an investigation of the loans extended by Korean financial institutions to their corporate borrowers based on forward-looking criteria - namely, corporations?debt levels and their debt-servicing capabilities ?while focusing on the future size of non-performing loans (NPLs). We define NPLs as loans and credits extended to corporations, whose interest coverage ratio commonly defined as the ratio of earnings before interest and taxes to interest expense is less than 100 percent.
Financial statements from 1998 demonstrate that the NPLs held by listed companies amount to 32.1 percent of their total debts carried. The ratio for unlisted companies in 1997 appears higher than that of listed companies. We classified our sample companies into four groups based on their sizes. (The rest omitted)