S&P cuts Toyo Property to junk

Standard & Poor's said it lowered to BB+ from BBB- its long-term corporate credit rating on Toyo Property Co. Ltd.

The downgrade reflects a view that Toyo Property will take a certain amount of time to restore the profitability of its mainstay wholesale commercial property brokerage business, which remains sluggish amid a flagging real estate market, S&P said.

The company's liquidity in hand, which has underpinned its sound financial position, is likely to fall due to changes in its business model and financial policy, the agency said.

The outlook is stable based on an assumption that the soundness of Toyo Property's financial base is unlikely to materially deteriorate, even after its financial policy changes, S&P said.

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