Aeon's business performance in fiscal 2012 was weaker than we expected. Key financial ratios for the company deteriorated in fiscal 2012 from the previous year. We believe financial measures for Aeon are unlikely to improve substantially in the next 12 months, because the company's forecast operating profit for fiscal 2013 is lower than we expected and the company plans to continue aggressive investments in fiscal 2013. We are lowering our long-term corporate credit and debt ratings on Aeon a notch to 'BBB+'. Aeon plans to launch a takeover bid for Daiei. Our ratings on Aeon remain on CreditWatch with negative implications because we believe that taking material control of Daiei would further worsen Aeon's financial standing. We will assess any
