Standard & Poor's has downgraded its long-term credit rating for Tokyo Electric Power Co. by five notches to junk status, saying it remains uncertain whether the operator of the Fukushima No. 1 nuclear power plant will be bailed out by the government.
The downgrading of the utility's long-term debt rating to B-plus from BBB comes as Tepco is struggling to procure funds to cover compensation payments.
S&P said Monday that while the government has announced a plan to help the utility compensate victims, the details remain unclear and lender banks will likely be forced to restructure Tepco's debt.
The ratings agency also said there is a high possibility that Tepco, the country's largest corporate bond issuer, will not be able to drastically increase fees in the short term, further hurting its financial outlook.