{"id":18056,"date":"2016-12-29T10:38:37","date_gmt":"2016-12-29T10:38:37","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=18056"},"modified":"2016-12-29T10:38:37","modified_gmt":"2016-12-29T10:38:37","slug":"toshiba-shares-bonds-tumble-as-second-downgrade-fans-writedown-fears","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/toshiba-shares-bonds-tumble-as-second-downgrade-fans-writedown-fears.html","title":{"rendered":"Toshiba shares bonds tumble as second downgrade fans writedown fears"},"content":{"rendered":"
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Toshiba shares bonds tumble as second downgrade fans writedown fears<\/span><\/strong><\/span><\/h2>\n

Toshiba shares bonds tumble as second downgrade fans writedown fears:-<\/strong> Shares in Toshiba (6502.T) fell more than 19 percent on Thursday, clocking a third day of heavy losses after the Japanese tech-to-nuclear conglomerate said earlier this week it faced a potential multi-billion dollar writedown.<\/span><\/p>\n

Bond yields have also surged and the cost of insuring against its debt have soared.<\/span><\/p>\n

Earlier this week, Toshiba said cost overruns at a U.S. nuclear business it bought from Chicago Bridge & Iron (CBI.N) last year, CB&I Stone & Webster, meant it could face “several billion dollars” in charges, acknowledging a bruising overpayment.<\/span><\/p>\n

Ratings agencies were quick to respond. Late on Wednesday, Moody’s became the second agency to downgrade Toshiba’s rating, pushing it deeper into “junk”, or non-investment grade territory, with a Caa1 rating, from B3.<\/span><\/p>\n

“Although Toshiba is still assessing the exact amount of the impairment loss, its financial metrics will likely deteriorate further, potentially resulting in a negative equity position,” said Masako Kuwahara, Moody’s lead analyst for Toshiba.<\/span><\/p>\n

Moody’s said the downgrade also reflected “mounting concerns” over corporate governance, especially in relation to due diligence for acquisitions. It said the ratings are under review for a further downgrade because of “potential for a further deterioration in Toshiba’s operating and financial performance”.<\/span><\/p>\n

Since Tuesday’s warning, Toshiba’s share drop has wiped about $6.5 billion off of its market value.<\/span><\/p>\n

The shares plunged 20 percent at the market open on Wednesday and at 0529 GMT (12.29 a.m. ET) on Thursday were down another 18 percent at 255 yen.<\/span><\/p>\n

The cost of insuring against a Toshiba credit default had soared by late Wednesday in the most actively traded London market. Five-year insurance, or credit default swaps, was quoted at 437\/467 bps TOSB5YJPAC=MG compared with Monday’s 75 bps.<\/span><\/p>\n

Toshiba bond yields have spiked as well. The company’s 1.68 percent bonds due 2020 JP00526502=JSDA were yielding 5.57 percent late Wednesday, up from 1.77 percent on Tuesday, Thomson Reuters data shows.<\/span><\/p>\n

Source:-\u00a0http:\/\/www.reuters.com\/article\/us-toshiba-accounting-stocks-idUSKBN14I06Q<\/span><\/div>\n

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