S&P downgrades Sharp to SD

Standard & Poor’s said it lowered the long- and short-term corporate credit ratings on Sharp Corp. to SD (selective default).

The agency also said it revised the CreditWatch implications on the ratings on Sharp’s long-term debt and commercial-paper program to positive from negative.

S&P also revised the CreditWatch implications on its long- and short-term corporate credit ratings to positive from negative, along with the commercial-paper program ratings on subsidiary, Sharp International Finance (U.K.) plc.

The ratings were placed on credit watch in February following news of a steep cut in the company’s forecast earnings for fiscal 2014, the agency said.

Sharp recently issued preferred securities to its two main lender banks to repay borrowings from each bank, S&P said. This transaction is considered a de facto debt-for-equity swap, which is defined as a selective default, the agency said.

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