Standard & Poor's Corp. said Thursday it has affirmed its AA-minus long-term corporate credit rating with a stable outlook and A1-plus short-term rating for Dentsu Inc.
The U.S. credit-rating agency said the ratings are based on the company's dominant position in the Japanese advertising industry that allows it to maintain a solid business performance despite difficult market conditions.
The ratings also reflect Dentsu's sound financial profile, characterized by solid cash flow generation, a strong capital structure and ample access to various sources of funding, it added.
"Despite its efforts to expand its international presence, Dentsu still has a high exposure to the Japanese market, where conditions will remain difficult at least in the current fiscal year," S&P credit analyst Machiko Amano said.
"However, we expect Dentsu to maintain its credit quality, given its solid earnings stream from ad and other businesses, its loyal client base, its strong media buying capabilities and its sound cash flow generation," Machiko said.