Standard & Poor's said Monday it has put the A-plus long-term debt rating of Vodafone K.K., the Japanese unit of the British mobile phone company, on its CreditWatch with negative implications because its financial standing might weaken if Vodafone Group PLC decide to sell it to Softbank Corp.
If the deal goes through, the Japanese subsidiary's long-term credit rating might be downgraded to BB or lower, the rating agency said.
S&P has kept the rating of the British parent unchanged at A-plus for the long term and A-1 for the short term with a stable outlook.
The rating agency said Softbank's credit standing is poorer than that of Vodafone Group, from which the Japanese subsidiary will cease to receive financial and other support once it has been sold off to Softbank.
On the other hand, the British parent might benefit as the group might use the profit from the Japanese unit sale to reduce its debt load, according to S&P.
Britain's Vodafone is negotiating the sale of the Japanese cell-phone business, which ranks a distant third after NTT DoCoMo Inc. and KDDI Corp., to the Internet and financial service company.