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.
Strong November U.S. car sales has industry poised to set a record for sales once December results are reported. More
The CEO of Facebook and his wife Priscilla Chan welcomed a baby daughter named Max. More
Have you heard of Harvey Mudd College? A degree from this small liberal arts school can cost more than a house, but grads earn about $92,300 a year after getting their degree. Google hired 11 Mudders last year. More