Moody's may downgrade Toshiba

Moody's Investors Service said it placed under review for possible downgrade the A3 long-term debt ratings of Toshiba Corp. and its supported subsidiaries. The prime-2 rating is unaffected.

The review follows Toshiba's announcement that it will purchase Westinghouse Electric Co. LLC from British Nuclear Fuels Ltd. for $5.4 billion. Toshiba will take a more than 51% stake of Westinghouse while its partners are expected to take a minority stake.

Westinghouse has retained a solid position in the world pressurized water reactor market. Moody's predicted that the purchase of Westinghouse could enhance Toshiba's nuclear businesses in the long term, which are based on boiling water reactor technologies, but Toshiba's financial flexibility could be significantly constrained in the meanwhile.

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