Moody’s cuts Sony’s credit rating to “junk”
Moody’s, one of the most well-known credit rating agencies, has cut Sony’s credit rating from Baa3 to Ba1 with a stable outlook. Ba1 is below investment grade. This will make it harder for Sony to borrow money.
“We expect the majority of its core consumer electronics businesses — such as TVs, mobile, digital cameras and personal computers — to continue to face significant downward earnings pressure,” said Moody’s in a statement.
The junk rating was given to Sony despite positive reviews of the PlayStation 4. Sony sold 4 million PS4 consoles over the holidays. However, video game consoles do not generate much profit since the margins initially after launching.
Standard & Poor’s is still rating Sony at BBB, which is two levels above junk. Fitch has Sony at junk as well as Moody’s.