Moody's Investors Service said today it may cut the ratings on Tokyo Electric Power Co's creditor banks if they forgive loans to the power utility.

"Forgiving loans to Tepco would hurt the creditworthiness of megabanks, major banks and life insurance companies and could lead to review of creditors' ratings with negative implications," Moody's said.

The ratings agency issued the comments after Japan's top government spokesman last week suggested that banks may be asked to forgive loans or make other concessions to help Tepco cope with massive compensation claims arising from the crisis at its stricken Fukushima Daiichi nuclear power plant.

Reuters