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Sony credit rating cut to junk status by Moody's


Moody's Investors Service has cut Sony's credit rating to the first level of junk status. Yes, there are multiple levels of junk in the lexicon trunk of finance. Moody's recognizes that Sony has made progress with its multi-year restructuring, but the ratings agency has concerns the company's TV and PC businesses are a challenge to Sony's overall stability.

Sony's drama has mostly to do with divisions other than games. Moody notes, "Profitability in the Games segment is expected to improve with the successful launch of PlayStation 4, but not to the extent seen with the profitability level in 2010."

Fitch Rating downgraded the company to junk status in late 2012, saying it believed a "meaningful recovery" for Sony would be slow.

Sony's junk bond status means it will have to pay a higher interest rate if it borrows money because it's a higher risk. There are still several levels of junk status before Sony hits the point of no return.
[wrangler via Shutterstock]

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