The rating on Hynix Semiconductor Inc. reflects the volatility of the company's earnings base, stemming from its high reliance on cyclical, competitive, and capital-intensive semiconductor operations, particularly commodity-like DRAM products. The rating also takes into consideration Hynix's still weak overall financial profile, although the company has significantly smoothed its debt maturities, and hence considerably lessened short-term liquidity pressures, following its successful sale of US$1.25 billion in new equity (about Korean Won (W)1.6 trillion). This sum exceeds the minimum amount that was necessary for the company to secure debt rescheduling and short-term financing arrangements from its principal bank creditors. The agreement by creditors, covering an aggregate W5.627 trillion, was critical to the company's ability to survive. On May 21, 2001, Hynix
