S&P upgrades Panasonic

Standard & Poor’s said it raised the long-term corporate credit and debt ratings on Panasonic Corp. and subsidiary, Panasonic Finance (Europe) plc, by one notch to A- from BBB+.

The agency also said it affirmed the short-term ratings on both companies at A-2.

The outlook is stable.

The upgrade is mainly the result of cost reductions and expanded sales in the business-to-business field, resulting in steadily improved profitability, S&P said.

The company’s progress in restructuring of unprofitable businesses has lowered the risk of a decrease in profit, the agency added. The streamlined cost structure has helped sales growth more directly increase profits, S&P said.

The agency said it believes Panasonic can control debt and keep its debt-to-EBITDA significantly less than 1.5x in the next two- to three-years.

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