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Sony debt rating downgraded to 'junk' status

Major credit rating agency cuts firm to below investment grade

Influential credit rating agency Fitch Group has downgraded Sony's debt rating to "junk" status.

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In downgrading Sony by three notches to BB-minus from BBB- minus, Fitch became the first of the big three ratings firms to cut the Japanese electronics firm to below investment grade, Reuters reports.

The downgrade will impact Sony's credit default swaps, insurance-like contracts against debt default or restructuring.

While Sony made a small operating profit in the financial quarter ended September 30 and stuck to its forecast for a full-year profit of $1.63 billion, Fitch citied weakness in the firm's consumer electronics and TV operations, predicting that meaningful recovery will be slow.

Last week Sony announced plans to raise £1.17 billion in cash through a sale of its convertible bonds.

Sony stock is down 40 per cent so far this year.

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