Ratings agency Moody's on Monday downgraded TEPCO, the operator of Japan's stricken Fukushima nuclear plant, to below investment grade, warning the rating was on review for further possible action. Moody's cited a worse-than-thought situation at the Fukushima Daiichi plant and the uncertainty surrounding the level of state support for TEPCO as it faces massive compensation costs.
The Japan unit of the major US credit rating firm said it downgraded Tokyo Electric Power's long-term issuer rating four notches to B1 from Baa3. Its senior secured debt rating was cut three notches to Ba2 from Baa2.
"The latest downgrade reflects further escalation of costs and damages from the continuing Fukushima nuclear plant disaster and increased concern that government support measures may not completely protect creditors from losses," Moody's said in a statement. The ratings agency cited TEPCO's disclosure that damage to the reactors at the Fukushima Daiichi nuclear plant was far worse than first stated with core meltdowns occurring hours after the March 11 disaster crippled cooling systems.
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