SoftBank Group Corp. issued a sharp rebuke after S&P Global Ratings cut its long-term credit rating another notch to undesirable, citing the Japanese tech conglomerate’s exposure to private-market valuations and other external risk factors.

SoftBank’s credit risks are rising as it sells off state-owned assets such as Alibaba Group Holding Ltd. and increases its exposure to private startups with more volatile valuations. It downgraded the company’s rating to BB from BB+. SoftBank shares fell 2.3% in Tokyo, and credit default swaps, the cost of insuring SoftBank’s debt, rose the most in a month.

SoftBank criticized the decision and said the rating agency failed to accurately analyze its circumstances. The Tokyo-based company argued that selling assets such as Alibaba in exchange for cash was clearly better for the stability of its balance sheet.

SoftBank is considering plans to become a lender in private lending

The downgrade won’t affect SoftBank’s borrowing costs or how it manages its balance sheet. Given the company’s ample cash reserves of more than ¥5 trillion, it won’t need to issue new bonds for some time.

SoftBank will still have to refinance about ¥350 billion in bonds sold to retail investors that mature in the March quarter of next year. Only time will tell how yields will trade at that time, but SoftBank’s coupon rate on bonds sold to individuals is tied to ratings from Japan Credit Rating Agency Ltd. not S&P.

This is not the first time SoftBank has fought with rating companies. It has had a multi-year conflict with Moody’s Investors Service, to which it has not provided information since March 2020.