S&P downgrades Sharp

Standard & Poor’s said it lowered the long-term corporate credit rating on Sharp Corp. two notches to CCC-.

The agency also said it kept the rating on CreditWatch with negative implications.

S&P also said the CCC+ long-term debt rating and C short-term corporate credit and commercial-paper program ratings also remain on CreditWatch with negative implications.

The agency also lowered the 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. The C short-term corporate credit and commercial-paper program ratings on Sharp International Finance also remain on negative watch.

The ratings were placed on negative watch in February following news of Sharp steep cut in forecast earnings, S&P said.

In March, the agency downgraded the company’s ratings to reflect a view that the company is more likely to ask its main lender banks for support as define by the agency’s criteria as a selective default (SD).

The latest downgrade considers the May 14 announcement that Sharp entered into a subscription agreement with its two main lender banks to issue preferred securities to repay borrowings from each bank as a part of the company’s medium-term management plan, S&P said.

This transaction is regarded as a de facto debt-for-equity swap and viewed as a selective default, the agency said.

After Sharp’s shareholders approve the issuance of preferred securities, S&P said it plans to lower the company’s long- and short-term corporate credit ratings to SD.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.