CONSUMER ELECTRONICS GIANT Panasonic has seen its long-term credit rating cut to one level above junk status by Moody's Investors Service.
Panasonic like its fellow Japanese rivals Sharp and Sony has been suffering from lower demand and increased competition from Samsung and other competitors in the consumer electronics market, leading to large losses. Now the firm's long-term credit rating has been cut by bond ratings agency Moody's by two levels to Baa3, one level above what is known as 'junk' status.
Moody's lower rating means that it will become harder for Panasonic to raise cash for capital spending. Should the firm's rating be cut to junk status, it would automatically mean that many institutional investors such as pension funds could not buy Panasonic's debt, reducing its access to cash and raising the interest rates it would have to pay to bond investors.
According to Moody's, "Panasonic may need to undertake additional restructuring measures. Challenging market conditions will continue to hinder the timely recovery of Panasonic's financial profile." The problem for Panasonic is that while Moody's might not have cut its credit rating to junk, its cost of borrowing is already much higher than it was even a month ago, making it harder for the firm to get out of its present situation.
Recently Panasonic said it expected to report a £5.9bn loss for 2012 and is in the midst of restructuring its business, which is adding to the astonishingly high loss for the year that it is widely expected to report. µ
But it's probably not going to be available to customers anytime soon
But it's OK cos he thinks the battery life is crap
Callas to Cupertino
Cheers, trebles and big bonuses all round