This study investigates whether Korean credit market participants such as credit rating agencies and creditors treat lease liabilities in their corporate credit risk assessments differently after the adoption of IFRS 16. We provide preliminary evidence of the impact of IFRS 16 on the credit market which requires lessees to recognize all lease liabilities in the balance sheet. Using samples from South Korea, we find that the association between lease obligation and firms’ credit risk measured by credit ratings increased after the adoption of IFRS 16, whereas the association between lease obligation and firms’ credit risk measured by the cost of borrowings did not change. Our empirical evidence suggests that the benefits from IFRS 16 differ by the level of credit market participants’ sophistication levels. Further, our analyses suggest that, unlike recognized finance lease liabilities, disclosed operating lease obligations are not associated with either credit ratings or the cost of borrowings under the previous lease accounting standard, IAS 17. After the operating lease liabilities are recognized in the balance sheet under IFRS 16, the lease obligations are statistically associated with credit ratings and the cost of borrowings.