-- Likelihood of an early recovery in NEC's financial soundness has receded, due to a slowdown in profit improvements as well as costly structural reforms.

-- We lowered the long-term and short-term corporate credit rating on NEC a notch to 'BBB-' and 'A-3', respectively.

-- The stable outlook reflects our view that the company's business should remain firm in the next two to three fiscal years, supported by strengths in its main businesses and reductions in fixed expenses.

TOKYO, JAPAN -- Jan. 30, 2012 -- Standard & Poor's Ratings Services today lowered its long-term and short-term corporate credit and debt ratings on NEC Corp. one notch to 'BBB-'. At the same time, we lowered our short-term corporate credit rating on NEC one notch to 'A-3'. We base the downgrade on our view that the likelihood of an early recovery in the company's financial

soundness to a level commensurate with the former long-term 'BBB' rating has receded. Amid an increasingly difficult business environment, NEC's profits have recovered more slowly than we assumed they would, and the company's financial standing is likely to deteriorate as it undertakes expensive structural reforms. We base the stable outlook on the long-term rating on our expectation that NEC's business performance will stay firm for the next two to three years, supported by strengths in its main businesses and reductions in fixed expenses.

NEC on Jan. 26, 2012, made a material downward revision to its financial forecast for fiscal 2011 (ended March 31, 2012), estimating a net loss of JPY100 billion. The main factors behind the lower earnings forecast are delays in production and shipping due to floods in Thailand, lower profitability due to weak sales of smartphones, large expenses related to a reduction in staff, and a loss related to revision of assumptions for deferred tax assets. The net loss will lower the company's net assets, weakening measures of its financial soundness as of March 31, 2012, compared with a year earlier. In light of intense competition, prolonged strength of the yen, and instability in overseas economies, Standard & Poor's believes NEC's financial soundness is unlikely to recover to a level commensurate with a 'BBB' rating in the foreseeable future.

Meanwhile, we expect revenues and profits in the company's main businesses, IT services and carrier network business, to continue to increase in fiscal 2011.

There are some positive factors for these businesses for the next fiscal year, such as expansion in IT investments among local governments and manufacturers as well as an enhancement of facilities needed to accommodate an increase in data traffic in line with the spread of smartphones. Although the company's

business environment is likely to remain difficult, structural reform will cut fixed expenses, and we expect this action will underpin profitability. As such, Standard & Poor's believes the company's business performance is likely to remain solid for the next two to three fiscal years.

Nevertheless, by Standard & Poor's estimates, measures of the company's financial soundness remain weak for the current rating. We may lower the ratings if we think the ratio of NEC's debt to EBITDA, after adjustments for lease and pension liabilities, is unlikely to moderate to below 4x in the next two to three years, likely due to a material deterioration in profitability or sizable mergers and acquisitions to enhance overseas business. The rating will come under stronger pressure if a steady improvement in the company's operating margin over the next year or two becomes less likely. An upgrade or upward revision of the outlook may require clearer prospects for an improvement in the company's financial soundness.

RELATED RESEARCH

"2008 Corporate Criteria: Analytical Methodology," April 15, 2008 "Principles Of Credit Ratings," Feb. 16, 2011

A Japanese-language version of this media release is available on Standard & Poor's Research Online at www.researchonline.jp, or via CreditWire Japan on Bloomberg Professional at SPCJ . Complete ratings information is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.

Primary Credit Analyst: Katsuyuki Nakai,

Tokyo

(81) 3-4550-8748;

katsuyuki_nakai@standardandpoors.com

Secondary Contact: Hiroki Shibata,

Tokyo

(81) 3-4550-8437;

hiroki_shibata@standardandpoors.com