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Moody's may upgrade Sega
Moody's Investors Service said it placed Sega Corp.'s B1 senior unsecured long-term debt ratings on review for possible upgrade.
The rating action is based on Moody's expectation that Sega's overall credit profile is likely to improve, reflecting the planned consolidation with Sammy Corp. (not rated by Moody's) effective Oct. 1. On May 18, Sega and Sammy, Sega's top shareholder since December 2003, announced their plan to consolidate by exchange of stock under a new holding company, Sega Sammy Holdings Inc. The plan was approved at the two companies' general shareholders' meetings held in late June.
The outstanding balance of Sega's series 5 convertible bonds at end-June 2004 was ¥6.8 billion. On June 29, the company's board of directors decided to repurchase the current outstanding bonds up to ¥5 billion. This decision is in line with the plan for consolidation with Sammy.
Moody's said that over the last couple of years, Sega has improved its operating performance by stabilizing overall earnings and reducing debt. Moody's upgraded the company's rating to B1 from B3 in December 2003.
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