On May 25, Standard & Poor's Ratings Services said it has placed its long-term credit rating on Japan Airlines Corp on "CreditWatch" for possible downgrading following media reports that the struggling airline is asking its major creditor banks for a debt-for-equity swap.

Under its credit ratings criteria, a debt-for-equity swap is considered to be equivalent to a default on debt obligations, S&P said in a statement. In general, the credit rating on a company that has proceeded with a debt-for-equity swap will be lowered to "selective default," it said.

"The long-term credit rating on JAL may be lowered if the company is unable to achieve recovery in its business performance in line with its medium-term management plan, or if the likelihood that its main banks will conduct a debt-for-equity swap increases," S&P said.