Moody’s: “Sony debt is virtual junk”
Moody’s has cut its rating on Sony’s debt to the lowest level above junk and warned of possible further downgrades. The credit agency reduced Sony’s long-term debt rating to Baa3 from Baa2, its third downgrade of the company this year.
“Earnings will stay weak due largely to prolonged operating losses in TVs and mobile phones, as well as significant declines in earnings from digital imaging products and games,” it said.
Sony posted its seventh consecutive quarterly net loss in the three months to September, although it is forecasting a small profit for the full fiscal year to next March.
Last week Standard & Poor’s slashed its rating on Panasonic’s long-term debt by two levels, from A- to BBB, while Fitch downgraded Sharp’s credit rating to the non-investment grade, or junk, level of B-.
Sony would be in even deeper trouble if not for its film and music businesses and its Japanese financial services arm, profitable areas whose earnings have partly offset its losses in electronics.