Moody's upgrades Toshiba

Moody's Investors Service said it upgraded Toshiba Corp.'s corporate family rating and senior unsecured debt rating to B1 from Caa1 and subordinated debt rating to B3 from Ca.

The outlook is stable.

The agency also said it affirmed Toshiba's commercial-paper rating of not-prime.

This action concludes a review for upgrade that began in May, Moody's noted.

The upgrades reflect the significant improvement in Toshiba's liquidity and financial position following the sale of its subsidiary, Toshiba Memory Corp., the agency said.

The sale of Toshiba Memory also has made Toshiba's earnings more stable – although greatly reduced – given that the volatile memory business represented 90% of consolidated operating profit in fiscal 2017 before its reclassification as discontinued operations, Moody's explained.

Following a ¥700 billion share buyback policy, Moody's also said it estimates that Toshiba will achieve a net cash position of about ¥400 billion by year-end March 2019, compared with a net debt position of ¥192 billion in fiscal 2017.

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