Lotte Chemical Dodges Default As Creditors Back Covenant Change

Bondholders of Lotte Chemical Corp. approved removing a covenant clause from the company’s debt, allowing a core part of one of South Korea’s largest conglomerates avoid a possible default.

Creditors agreed to take out the language around an interest coverage requirement in bond documents that Lotte Chemical failed to meet in third quarter, the company said in a statement. Without the approval, the deficiency may have allowed investors declare an event of default and force an early redemption of the notes.