By Sam Nussey and Hideyuki Sano

TOKYO (Reuters) - SoftBank Group (SBG) Corp's <9984.T> shares plunged after three days of huge gains and the cost of credit derivatives to insure against bankruptcy rose on Thursday after Moody's downgraded the tech conglomerate's debt rating by two notches.

SBG shares fell 9.4% following a 55% rise over the preceding three sessions as the firm became the first high-profile Japanese victim of a wave of corporate downgrades worldwide amid the coronavirus pandemic.

Its five-year credit default swap spread rose to around 400 basis points from around 360 bps <SFTB5YJPAC=MG>, reversing its fall in the past three sessions.

That was still off a peak above 500 bps hit last week at the peak of market panic but still more than double its levels last month.

The yield on the company's bonds maturing in 2024 <JP00559984=> rose to 3.967% from 3.868% the previous day. It was around 1.5% at the start of month.

SoftBank spokesman did not immediately respond to a request for comment.

Late on Wednesday, Moody's downgraded SBG by two notches to Ba3 and said it was reviewing the firm for a further downgrade.

That came after rival rating firm Standard & Poor's last week changed the outlook of its BB+ rating on the group to negative from stable.

To some investors, the rating came as little surprise given the group's highly leveraged investments in tech firms around the world through its $100 billion Vision Fund.

In November, as the group posted a 706 billion yen operating loss, CEO Masayoshi Son himself admitted poor judgment and turning a blind eye to problems at startup WeWork, one of its main investments.

The massive loss brought Son's aggressive buying binge under more scrutiny, with the coronavirus outbreak compounding worries about further investment losses.

The Saudi Arabia-backed Vision Fund, which is run by ex-Deutsche Bank banker Rajeev Misra, had invested $70.7 billion in 88 companies at the end of September.

"I sold all SoftBank bonds late last year," said Tadashi Mastsukawa, Tokyo head of fixed income investment at PineBridge Investments.

"After the company announced huge losses, I felt uncomfortable about it."

To restore investor confidence, SBG this week unveiled a plan to raise as much as $41 billion through asset sales to buy back shares and reduce debt.

The unprecedented move helped to stem nosedives in its shares but investors had mixed reactions.

"It is a good thing that they will reduce leverage. It is also great that they can generate cash when everyone else is struggling to raise it," said a veteran fund manager at a Japanese asset management firm.