Moody's upgrades Softbank from junk

Moody's Investors Service said it upgraded the issuer rating of Softbank Corp. to Baa3 from Ba2. The action concludes the review for upgrade begun on July 1.

The outlook is stable.

The action is in response to the refinance of the whole business securitization, which was used for the acquisition of the mobile phone business from Vodafone in 2006 and has restricted Softbank's access to the cash flow of the mobile phone business, according to the agency.

The upgrade also reflects the company's improved financial profile and its third but improved position in the Japanese telecommunication market, the agency noted.

The Baa3 ratings also consider the evolving and competitive environment in the telecommunication industry in Japan and the near to intermediate term high demand on cash flow to meet the company's capital expenditure plans and scheduled debt repayments, the agency said.

The company's adjusted debt-to-EBITDA ratio improved to 2.9x in the 12 months to June, from 5.3x in fiscal year-end 2007.

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