Junk rating for bleeding Sony and Panasonic
Japan's iconic TV makers will struggle against the strong yen and weak demand, says Fitch
Sony and Panasonic, the Japanese electronics makers reeling from record losses, have had their long-term credit ratings downgraded to junk by Fitch Ratings, citing a weak recovery in the television market.
Sony's rating was cut by three levels to BB-, three steps below investment grade, with a negative outlook, Fitch said yesterday.
Panasonic's was lowered two levels to BB, also with a negative outlook, the ratings company said. Both had their short-term ratings reduced to B from F3.
The companies would struggle amid a strong yen and weakened economic conditions in Japan and overseas, Fitch said.
Japan's two largest TV makers and smaller rival Sharp are suffering from weaker demand and more competition with Samsung Electronics and Apple.
"Meaningful recovery will be slow given the company's loss of technology leadership in key products," Fitch said of Sony. Panasonic's downgrade reflected reduced competitiveness and weak cash generation, the ratings company said.