Moody's cuts Promise

Moody's Investors Service said it downgraded the long-term issuer and senior unsecured debt ratings of Promise Co., Ltd. to Ba1 from Baa2.

The outlook is negative.

The action concludes the review for possible downgrade that began in February.

The downgrade primarily reflects the persistent pressure on the company's business model, which will lead to further declines in its revenue and asset base for the foreseeable future, Moody's said.

The downgrade also considers the uncertainty about profitability due to growing credit costs stemming from overpaid interest claims as well as the introduction of loan amount caps, the agency said.

That challenges Promise faces are the same for the entire consumer loan industry in Japan, Moody's added.

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