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Sony's debt rating cut by Moody's on weak profitability

Friday, 12 Oct 2012 | 3:07 AM ET

TOKYO, Oct 12 (Reuters) - Sony Corp's long-term debt rating was lowered one notch by Moody's Investor Service to the second-lowest investment grade because of weak profitability in products ranging from televisions to mobile phones.

The downgrade to Baa2 follows a similar cut to Sony's credit standing by Standard & Poor's last month. The lower ratings mean Sony will have to pay more to investors when borrowing money through bond issues.

Moody's threatened a further cut unless Sony's performance improved.

"If a significant improvement in the company's financial profile is not evident in a relatively short time, its ratings will be reviewed for further downgrade," the rating agency said in a report.

In the past three months Sony has spent $1.8 billion to buy companies ranging from medical equipment to cloud gaming. . Rather than borrow to fund the acquisitions, the company instead sold assets, including a chemicals business.

Sony will report its earnings for the three months Sept 30 on Nov 1.

(Reporting by Tim Kelly; Editing by Richard Pullin)

((tim.kelly@thomsonreuters.com)(+813-6441-1311))

Keywords: SONY MOODY/RATING

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