Fitch Ratings has downgraded Sony Corporation's creddit rating from BB- to BBB-, effectively classifying the company as having a "speculative or junk" rating.

Panasonic was also downgraded at the same time.

CNN.com notes that "both Sony and Panasonic have been haemorrhaging money and struggling to find positive momentum". Sony was once a crown jewel of the Japanese electronics industry but now has a market cap of just $10billion and hasn't turned a profit in four years.

"We think there is little headroom for Sony," Fitch's Steve Durose said in a statement.

"Without a radical change to the structure of their businesses it is difficult to see profitability improving enough for [Sony and Panasonic] to regain investment-grade ratings," Durose said.

Fitch Ratings are applied to both companies and countries, and are used by investors to determine what price and interest rates to apply to organisations. The ratings  

See also

Sony rumoured to be selling off entertainment division

PlayStation Vita (vs iPad) review