S&P downgrades Sharp, debt

Standard & Poor's said it lowered its long-term corporate credit and debt ratings on Sharp Corp. to CCC+.

The ratings remain on CreditWatch with negative implications.

The agency lowered its short-term corporate credit and commercial paper program ratings on Sharp to C and placed them on CreditWatch with negative implications.

S&P also lowered its long-term corporate credit rating on Sharp's overseas subsidiary Sharp International Finance (U.K.) plc to CCC+ and kept it on CreditWatch with negative implications.

On Feb. 4, S&P placed the long-term ratings on Sharp and its subsidiary on CreditWatch with negative implications following Sharp's announcement of a steep cut in forecast earnings.

The downgrades and CreditWatch placements reflect the agency’s view that Sharp is more likely than previously to ask its main lender banks for support in a form it defines as SD (selective default), such as a debt-for-equity swap, modifications to existing debt, or a debt waiver.

S&P said it may further lower its ratings on Sharp by more than one notch if in the next few months it sees a greater likelihood of lender bank support in a form it deems as SD.

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