Moody's Investors Service said Wednesday it has upgraded Japanese Internet firm Softbank, saying its major purchase of Vodafone's Japanese unit should buoy its competitiveness.
The risk evaluator upgraded Softbank's long-term debt rating and issuer rating to Ba2 from Ba3, with a stable outlook.
Softbank, which owns search engine Yahoo Japan, completed a deal in April to buy Vodafone Japan for 15 billion dollars.
It plans to rebrand it "Softbank Mobile" on October 1, ditching the name of the British giant which struggled to penetrate the tough Japanese market.
The move "will diversify and greatly enhance Softbank's position in Japan's telecommunication market, since it will create a competitive domestic integrated telecom operator," Moody's said.
"The upgrade also incorporates Moody's expectation that the acquisition will strengthen Softbank's ability to generate stable cash flow," it said.
The rating action followed Softbank's announcement Tuesday it returned to profit in the first quarter on a broad business turnaround.
Softbank president Masayoshi Son, one of Japan's richest entrepreneurs, vowed to pump money into the Vodafone unit to make the acquisition a success.
