Nissan Motor Co.s international credit rating fell a notch today because of concerns over the companys declining cash flow.
Standard & Poors Ratings Services lowered Nissans long-term corporate credit and senior unsecured debt ratings to BBB from BBB+.
The rating keeps Nissan credit within investment grade -- it would have to be lowered two more levels to fall below that.
Nissan CEO Carlos Ghosn said this month that the automaker will lose about $2.9 billion in the 2008 fiscal year, which ends March 31. He said the automaker is cutting global costs in response, including the elimination of 20,000 jobs.
In a report released in Tokyo today, Standard & Poors said it thinks Nissans profitability will remain under pressure in fiscal 2009.
Nissan could generate a small positive free cash flow, backed by the return of production to near normal levels and by slashing capital expenditures, the report said.
But it added, The ratings on Nissan may be lowered further if the company is unable to generate at least zero free cash flow in fiscal 2009 and stop debt from increasing at its automotive business.
As of Dec. 31, Nissan had cash of ¥470 billion, or about $5.14 billion, according to Standard & Poors.
The ratings service had placed Nissan on credit watch Feb. 10. Todays downgrade removes Nissan from credit watch.