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S&P cuts Mitsubishi Motors to SD
Standard & Poor's said it lowered its long-term issuer rating on Mitsubishi Motors Corp. to SD from CC following the completion of a capital infusion totaling ¥274 billion, including a debt-for-equity swap worth ¥54 billion by Bank of Tokyo-Mitsubishi Ltd. (A-/positive/A-1). Mitsubishi Corp. (A-/positive/A-2) and Mitsubishi Heavy Industries Ltd. (BBB/negative/--) are also contributing to the capital infusion.
"Standard & Poor's views debt-for-equity swaps as tantamount to default, since the consideration received is less than par value," said S&P credit analyst Chizuko Satsukawa.
The long-term corporate credit rating represents the issuer's willingness and ability to pay all financial obligations on a timely basis. An SD rating is assigned to an issuer if it receives a debt-for-equity swap and selectively defaults on a specific issue or class of obligations, even though the issuer is not in default legally and continues to pay other obligations.
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