(The following statement was released by the rating agency)
Dec 10 - Standard & Poor’s Ratings Services today affirmed its ‘A-2’ short-term credit rating on Toshiba Corp.’s (Toshiba; BBB/Stable/A-2) JPY600 billion domestic currency commercial paper program, which the company has increased from JPY400 billion.
Our ratings on Toshiba reflect its stable profits and cash flow--from power generation, other industrial systems, and medical equipment--as well as strong competitiveness in NAND flash memory, backed by technological strengths and enhanced production. Standard & Poor’s Ratings Services also factors into the ratings stable financing and access to capital markets. Constraints on the ratings are the core semiconductor business’ high susceptibility to market fluctuations and its highly variable profits, the company’s consistent need for heavy capital investments, its heavy financial burden of mergers and acquisitions (M&A), and its relatively weak measures of cash flow protection and weak debt-to-capital structure for the current ratings. The company has a “satisfactory” business risk profile and “intermediate” financial risk profile.
2008 Corporate Criteria: Analytical Methodology, April 15, 2008
Industrials: Key Credit Factors: Business And Financial Risks In The Global High Technology Industry, Sept. 18, 2008
2008 Corporate Criteria: Commercial Paper, April 15, 2008