TOKYO-Standard & Poor’s Corp. said it downgraded the investment grade corporate ratings of
nine Japanese industrial companies.
The ratings of NEC Corp. and Mitsubishi Electric Corp. both were lowered a
notch to A-3 from A-2, and the rating of Matsushita Electric Industrial Co. also was lowered a peg to AA-from
AA.
“In light of the heightened business and financial risks they face, Japanese corporations must achieve
higher thresholds of earnings and cash flow generation and maintain more conservative debt profiles to sustain the level
of credit quality they have enjoyed in past years,” said an announcement issued jointly by five S&P
analysts.
“In essence, their credit protection measures must be more in line with international standards … It is
now harder to predict whether troubled Japanese companies will receive needed financial support, given the
deteriorated capacity of banks and other financial institutions to provide assistance [and] the tougher line some
companies are taking with related firms that [ask] them for help.”
