SoftBank Group's logo at a company function in Tokyo, Japan. Picture: REUTERS/ISSEI KATO
SoftBank Group's logo at a company function in Tokyo, Japan. Picture: REUTERS/ISSEI KATO

Tokyo — SoftBank on Wednesday hit out at credit ratings agency Moody's after it downgraded the technology group by two notches to Ba3 and took the unusual step of asking for the ratings to be withdrawn.

Moody's said it was reviewing SoftBank for a further downgrade as the group moves to sell down core parts of its portfolio to offset the weak performance of its tech bets.

That decision is based on “excessively pessimistic assumptions” and “will cause substantial misunderstanding among investors” and “result in significant confusion for issuers”, SoftBank said in a statement.

“We decided to request Moody's to withdraw its corporate and foreign currency bond ratings.”

SoftBank said this week it would raise as much as $41bn through asset sales to fund its biggest-ever stock buyback, after investors sold shares due to concern over high leverage and souring bets on unproven start-ups via the $100bn Vision Fund.

SoftBank's shares have rallied 55% since the buyback announcement, which will see the group retire almost half its shares. But its ability to engineer the sale of part of a portfolio that includes Chinese e-commerce group Alibaba is under scrutiny as the coronavirus outbreak rattles markets.

“Asset sales will be challenging in the current financial market downturn, with valuations falling and a flight to quality,” Moody's analyst Motoki Yanase said.

SoftBank has declined to identify the assets that will be sold down or monetised, with likely candidates including stakes in Alibaba and domestic wireless carrier SoftBank Corporaton. It plans to make the transactions over the next four quarters

Last week S&P Global Ratings revised its outlook for SoftBank to negative but stopped short of a ratings downgrade.

After the asset sale announcement, S&P said Softbank “has the potential to ease the downward pressure on its credit quality”.