The ratings on Toshiba Corp. were placed on CreditWatch with negative implications on Nov. 5, 2001. The CreditWatch listing reflects increasing concerns over Toshiba's ability to recover its profitability, as well as the company's ability to service its financial commitments at a level commensurate with the current ratings. Toshiba intends to contain its debt at current levels through measures such as asset sales. However, the company's capital structure is expected to deteriorate significantly, owing to a higher-than-expected net loss, which will erode its capital base. Moreover, Toshiba's weakened earnings-generating ability is significantly impairing its profitability and cash flow protection. Worse-than-expected conditions in the IT industry have forced Toshiba to substantially lower its initial profitability forecasts for the second half of
