S&P; Downgrades Toshiba’s Rating

Toshiba Corp.’s long-term debt rating was cut by Standard & Poor’s to BBB from BBB-plus on falling profitability and cash flow. The world’s second-largest chip maker’s short-term rating was cut to A-3 from A-2.

The BBB long-term and A-3 short-term ratings are Standard & Poor’s second-lowest investment grades. The outlook for the long-term rating is negative, meaning it may be cut again, said S&P.;

The U.S. debt-rating service cited Toshiba’s weakening business base and said it does not expect Toshiba to see a marked improvement in its fundamental earnings and cash-flow generation in the short term.

Toshiba’s shares rose 30 cents to $3.50 in U.S. over-the-counter trading. The rating company announced the ratings cuts after the market closed in Tokyo.