Sony Corp is to raise $1.26 billion by issuing five-year and 10-year corporate bonds to pay off outstanding debts, the electronics manufacturer said today.
Sony spokesman Mr Gerald Cavanagh said there were two reasons for the issues: "We issued bonds in 1993. So the issue is to repay the debt on our existing bonds. The remainder is to be used for investments in various projects".
The majority would be used to repay debt on existing straight bonds, he said.
"Sony's strong position in the world consumer electronics market, as well as electronics components and content, should generate healthy profit and cash flow in the medium- to long-term," credit agency Moody's said.
Sony's electronics products division suffered operating losses in the first quarter of this fiscal year to March 2002 largely due to problems with defective mobile telephones and costs incurred in restructuring its Aiwa subsidiary.
Sony's audio-visual products and semiconductors are suffering from the global slowdown and stiffer price competition.
"If the recent decline of Sony's electronics division were to continue, this could have a negative effect on the overall performance of the company," Moody's said.
AFP