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S&P Downgrades Toyota After Loss

Toyota's long-term corporate credit ratings fell to 'A' from 'AA+', with a negative outlook.

Standard and Poor's downgraded its credit rating on Toyota Motor after the world's largest automaker reported its first ever annual loss and warned of worse to come.

S&P lowered its long-term corporate credit ratings on the company to "AA" from "AA+", with a negative outlook.

"The deterioration in global auto markets will continue to pressure Toyota's profitability and cash flow through at least the current fiscal year, and may delay a recovery in Toyota's operating and financial performance," S&P said. "Global auto demand will almost certainly remain depressed throughout calendar 2009, a situation that is likely to continue into 2010."

Toyota earlier reported a net loss of 436.9 billion yen (US$4.4 billion) for the year to March, worse than its own forecast and a dramatic turnaround from the previous year's record profit of 1.72 trillion yen.

For the current business year it is forecasting a net loss of 550 billion yen and an operating loss of 850 billion yen.

Copyright Agence France-Presse, 2009

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