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S&P cuts Mitsubishi Motors
Standard & Poor's said it lowered its corporate credit rating on Mitsubishi Motors Corp. to SD from CC. The rating on the company's senior unsecured bonds remains at CCC+.
The outlook on the debt rating remains negative.
"The downgrade of MMC follows the completion of payment for ¥130 billion of the company's class G preferred shares by its main creditor banks," said Chizuko Satsukawa, a credit analyst at S&P.
According to Mitsubishi Motors' news release dated June 8, the company issued ¥90 billion of the preferred shares to Bank of Tokyo-Mitsubishi Ltd. (A-/stable/A-2) and ¥40 billion to Mitsubishi Trust & Banking Corp. (A-/stable/A-2). As proceeds from the issuance will be used to pay off debt outstanding with the banks, S&P said it views this transaction as a debt-for-equity swap on the bank loans.
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