Moody’s cuts Toshiba, debt to Caa1, Ca

Moody's Japan K.K. said it downgraded Toshiba Corp.’s corporate family rating and senior unsecured rating to Caa1 from B3 and subordinated debt rating to Ca from Caa3.

At the same time, the agency placed the ratings under review for further downgrade.

"The downgrade of Toshiba's ratings principally reflects Moody's deepening concerns over the sustainability of Toshiba's near-term liquidity, as well as the substantive and rapid erosion of its equity base," Moody's vice president and senior analyst Masako Kuwahara said in a news release.

The downgrade comes after the company's announcement of a likely material impairment loss related to the acquisition of a nuclear construction and services provider in the United States, for the fiscal year ending March 31, 2017.

"Although Toshiba is still assessing the exact amount of the impairment loss, its financial metrics will likely deteriorate further, potentially resulting in a negative equity position," Kuwahara added in the release.

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