S&P Global Ratings says it has downgraded the rating for Japan's SoftBank Group due to the poor performance of its investment fund.

The ratings agency announced on Tuesday that it lowered the group's long-term debt rating by one notch from BB+ to BB.

S&P cited higher asset risk for the downgrade, as performance of the fund worsened due to the falling share prices of tech firms it invests in.

But S&P says the outlook is stable, because the tech and investment group has a stake in its British chip designer subsidiary, Arm, whose planned initial public offering in New York is expected to raise massive funds.

SoftBank Group posted a net loss of 7 billion dollars in the year through March. It has since been scaling back investments to strengthen its financial base.

The group said in a statement that "it is extremely regrettable that our financial soundness was not properly assessed, and we will continue our dialogue with S&P."

The group also said, "We have strongly urged S&P to consider an upgrade once the proposed initial public offering of Arm is completed."