Moody's Investors Service on Auguat 09 raised its debt rating on Softbank Corp one level based on the view that its acquisition of Vodafone Group Plc's Japan unit would enhance its position in the telecoms industry.
Moody's said it had upgraded Softbank's long-term debt rating and issuer rating to Ba2 from Ba3, with a stable outlook. The rating agency had put Softbank's debt under review on March 17 after Softbank said it would buy Vodafone Japan, a Tokyo-based mobile phone operator officially known as Vodafone K.K.
The upgrade contrasts with the view of Standard & Poor's Rating Services, which had put Softbank's credit rating, BB-, under a possible downgrade in March. S&P had said the acquisition weakened Softbank's credit quality.
Softbank, Japan's second-largest Internet access provider, on Tuesday reported its fourth consecutive quarterly operating profit, boosted by contributions from Vodafone Japan, for which Softbank paid about $15 billion in Asia's biggest leveraged buyout.
"The acquisition will strengthen Softbank's ability to generate cash flow," Moody's said.
Moody's is also reviewing the Baa2 debt of Vodafone Japan for a possible downgrade. Vodafone Japan is a distant third to NTT DoCoMo Inc and KDDI Corp in Japan's 8.7 trillion yen ($75 billion) wireless market.