Moody's cuts Sony rating to just above junk
updated 07:52 pm EST, Fri November 9, 2012
Shrinking demand leads to Sony downgrade
Moody's Investor Service dealt a blow to Sony today, downgrading the Japanese electronics giant's long-term debt rating from Baa2 to Baa3. This is the second downgrade for Sony's debt in as many months, as Moody's expressed little faith in Sony's ability to counteract shrinking demand for its consumer electronics products. Moody's analysis recommends "robust restructuring" for Sony over the next 12 to 18 months.
Another downgrade from Moody's would lower Sony's rating to junk. Such a status would require that some funds offload the company's debt, making it difficult for Sony to raise money in credit markets.
Sony has struggled in recent years to generate interest in its consumer electronics products, which are often in the shadow of offerings from Apple and Samsung in the mobile sector and Nintendo and Microsoft in the gaming sector. The sale of a chemical business the company owned helped stave off massive losses in the past quarter, and the company is rumored to be considering the sale of its New York headquarters.
