TOKYO, Japan (CNN) -- Moody's, the international ratings agency, downgraded Toyota and its subsidiaries by one notch Thursday over the automaker's capacity to repay debt.
The prior rating was Aa1; it is now Aa2.
The rating, while still relatively strong, shows the ratings agency's concern over the worldwide Toyota recalls.
Moody's also cited profitability concerns over the looming litigation in the United States.
"We do not take this rating change lightly," said Toyota spokesman Paul Nolasco. "We plan to aim for an improved rating by making the best management decisions we can with customer trust as our top priority."
Toyota also saw its ratings plummet in the annual Forbes Magazine list of the world's leading companies. Last year, Toyota was ranked number 3.
This year, it is number 360.
Toyota (TM) did not issue a comment about the magazine listing.
Stocks rose a lot in May but volatility returned. It's all about the Federal Reserve now. More
The U.S. economy lost ground in the first quarter, but it is already showing signs of life. More
Why can't the IRS protect you? Either its too broke -- or it's not spending its $10.9 billion budget the right way. More
A generous patron left a $2,000 tip earlier this week at a D.C. restaurant. More