Moody's cuts Panasonic

Moody's Investors Service said it downgraded to A1 from Aa3 the long-term senior unsecured debt and issuer ratings on Panasonic Corp.

The outlook is stable.

This concludes a review for possible downgrade that began in July.

The prime-1 short-term ratings on Panasonic's supported subsidiaries, Panasonic Finance (America) Inc. and Panasonic Finance (Europe) plc, are not affected by this rating action, the agency said.

The downgrade reflects a concern that Panasonic's acquisition of all of the shares of its two major consolidated subsidiaries, Panasonic Electric Works Co., Ltd. and Sanyo Electric Co., Ltd., will weaken its financial position, Moody's said.

The company also will need some time to restore its balance sheet, given a weak recovery in demand, strong yen and intense competition, the agency said, and plans for a major reorganization.

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