As the loan maturity for Homeplus lease stores approaches, tensions are rising within the financial sector. Conflicting interests between senior lenders, such as banks, and subordinate lenders, like savings banks, have complicated discussions among creditors. The uncertainty surrounding Homeplus's rehabilitation process has raised questions about the reliability of rental income and the maintenance of collateral value.
According to the financial sector, the Financial Supervisory Service (FSS) has been holding meetings with lenders regarding Homeplus lease store loans since July 7. The FSS is reviewing the scale of lease store loans, their maturity status, and the responses from various financial institutions.
Homeplus is not the direct borrower of the lease store loans. Instead, the loans are taken out by property owners, real estate funds, or special purpose companies (SPCs) that own the properties. Homeplus is the tenant leasing these stores. However, since the primary source of repayment for these loans is the rent paid by Homeplus, any instability in Homeplus's rehabilitation process could jeopardize the repayment ability of the borrowers.
If Homeplus continues its operations normally and rental payments are received, the situation may not be critical. However, if the rehabilitation process is terminated or leads to bankruptcy, the scenario changes. Rent reductions, store closures, or lease contract terminations could occur, potentially disrupting the repayment of loans by property owners, real estate funds, and SPCs.
Some loans are set to mature as soon as August 5. Stores that receive rent and interest payments regularly may not face significant issues with loan extensions. However, stores heavily reliant on Homeplus's rental payments may find it difficult to secure extensions depending on the outcome of the rehabilitation process.
The core issue in creditor discussions is the differing positions of senior lenders and subordinate savings banks. Senior lenders, such as banks, can recover their loans relatively quickly by executing collateral rights. In contrast, subordinate savings banks must wait until senior lenders have been paid before they can claim any remaining assets. If collateral values decline or sale prices drop, savings banks are likely to incur losses.
Financial authorities believe that financial institutions should avoid hasty recoveries and instead respond through creditor discussions. The possibility of Homeplus's normalization has not been completely ruled out. If there is progress in negotiations for new funding or between major shareholder MBK Partners and funding sources, the uncertainty surrounding lease store loans could diminish. Additionally, amendments to the Distribution Industry Development Act currently under discussion in the National Assembly could also impact Homeplus's recovery.
However, if financial institutions individually pursue collateral execution or debt recovery, it could exacerbate the situation. A simultaneous sale of stores could lead to a decline in real estate values and hinder Homeplus's normalization. Therefore, authorities emphasize the need for a coordinated response rather than individual recoveries.
Not all lease store loans are at risk. Loans for stores where Homeplus only leases part of the building or where real estate funds or REITs hold other quality assets are relatively less likely to default. The main concern lies with stores that are almost entirely dependent on Homeplus's rental payments. Savings banks, in particular, are already facing increased management burdens due to real estate project financing defaults and rising delinquency rates.
Subordinate savings banks are particularly sensitive to potential losses. Their exposure related to Homeplus REITs is reported to be around 47.6 billion won, including 37.6 billion won in subordinate loans and 10 billion won in common stock investments. A financial sector official stated, "While the risk levels vary by store, if Homeplus's bankruptcy is confirmed or rental payments cease, losses could primarily affect subordinate savings banks. However, the overall exposure of the savings bank sector is not large, so the risk of it spreading across the entire sector is limited."
* This article has been translated by AI.
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