SoftBank has pushed back against S&P Global Ratings’ decision to plunge its long-term credit rating deeper into junk territory on Tuesday, calling out the move as "extremely regrettable."
S&P downgraded the Minato, Tokyo-based investment management firm’s rating from BB-plus to BB, meaning “speculative grade” or “junk.”
"There is a marked lack of rationality in the explanation," SoftBank CFO Yoshimitsu Goto told Reuters on the rating change.
SoftBank added in a statement: “Over the past year, our strict defensive financial management has strengthened our financial position as never before.”
"It is extremely regrettable that our financial soundness was not properly assessed, and we will continue our dialogue with S&P.”
S&P’s reasoning for the rating change was SoftBank’s exposure to unlisted companies susceptible to external factors, as reported by several news outlets.
It comes after SoftBank sold off assets, including its shares in Chinese e-commerce company Alibaba, which, in turn, increased its holdings in startups with more volatile valuations.
"(The sale of its shares) have eroded the proportion of listed assets in its portfolio,” S&P said in its report, per Reuters.
“Furthermore, the technology stocks in which the company has primarily invested have been depressed for a prolonged period.”
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