The shares of Toshiba (T: 6502) lost more than 19% on Thursday, falling for a third day in a row after the Japanese technology conglomerate reported earlier in the week about the likelihood of multibillion-dollar write-offs.
Bond yields rose, the insurance cost of the company's debt has increased dramatically.
Earlier in the week, Toshiba announced that it had an excess in spending for the company’s US nuclear business, which it acquired from Chicago Bridge & Iron last year, meaning that it could face write-offs in "several billion dollars".
The rating agencies have not waited long for a reaction. On Wednesday evening, Moody's became the second agency downgrading the rating of Toshiba, sending it deeper in the "junk" territory - from B3 to Caa1.
"While Toshiba didn’t evaluate the size of losses more exactly, its financial performance is likely to further deteriorate, which may lead to negative capital" - said Masako Kuwahara, a leading analyst of Moody's on Toshiba.
On Tuesday, Toshiba shares fell sharply, reducing the company's market value by about $ 6.5 billion. At the opening of Wednesday session, the company's shares fell 20%, and on Thursday, they fell by another 18%.
In addition, bond yields jumped sharply. Liabilities maturing in 2020 had a yield of 5.57% on Wednesday, against 1.77% on Tuesday, according to Thomson Reuters data.
Toshiba shares were the worst performers of Thursday, along with the shares of SUMCO Corp. (T: 3436), which fell 81.0 p (5.08%), closing at 1,514.0 and Tosoh Corp. (T: 4042), which decreased in price by 41.0 p (4.77%) and closed trading at around 819.0.
As for the Japan's stock market as a whole, it closed the session lower amid negative dynamics from the shipbuilding, steel industry and power supply sectors.
At the close on the Tokyo Stock Exchange, Nikkei 225 fell 1.32%.
On the Tokyo Stock Exchange, the number of cheapened securities (2379) exceeded the number closed in the positive territory (676), and the quotes of 270 shares remained virtually unchanged.