Moody's may cut Toyota Credit

Moody's Investors Service said it placed the Aa2 senior long-term ratings on Toyota Motor Credit Corp. under review for possible downgrade.

The company's prime-1 short-term rating was affirmed and not affected by the review, Moody's said. The review is in conjunction with the agency's decision to place the long-term ratings of Toyota Motor Corp. and subsidiaries on review for possible downgrade.

Given Toyota Motor Credit's strategic importance to Toyota and the strength of the credit support agreement structure, its ratings are equalized with those of Toyota, the agency said.

The downgrade review reflects a view that Toyota's financial and operating performance will worsen in the aftermath of the March 11 earthquake and tsunami and the resulting supply chain disruptions, Moody's said.

Toyota's financial performance already was weak relative to expectations for the Aa2 rating level, the agency said, which was reflected in the negative outlook.

Although Toyota's factories have not suffered any significant damages due to the earthquake and tsunami, the disaster has apparently disrupted the shipping of about 500 components and the shortage of even one component can significantly disrupt production, Moody's said.

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