Moody’s degrades Toyota rating
The credit rating agency, Moody's Investors Service has cut down the credit rating of Toyota Motor Corp. from Aa1 to Aa2 on the ground that profit is likely to remain low at least till 2012 and the company has to bear huge litigation costs.
Toyota, Japan based the world's largest car maker has recalled more than 8 million cars and trucks globally due to sticky pedals and concerns of sudden unintended acceleration.
The auto maker recently agreed to pay a huge fine of $16.4 million for its recall mainly in US.
The company predicts that the recall causes the loss of 180 consumer and lawsuits from shareholders, costing $2 billion for the fiscal year ending in March 31.
Shares of the company decline 1.9 percent in Tokyo.
ToyoTadashi Usui, a Moody's vice president and senior analyst said, "In coming years, further impacting profitability, on an extraordinary basis, will be the litigation costs associated with the recall."
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