Sojitz Corporation's ratings are as follows.
(as of November 29, 2012)
|Issuer Credit Ratings||Senior unsecured debt Ratings||Short-term Ratings|
|Japan Credit Rating Agency, Ltd. (JCR) >>||BBB||BBB||J-2|
|Moody's Issuer Credit Ratings>>||Baa3||-||-|
|Rating and Investment Information, Inc. (R&I) >>||BBB||-||a-2|
|Standard & Poor's (S&P) >>||BBB-||BBB||-|
* Click symbols to open separate windows of credit rating symbols and definitions.
* Corporate credit ratings are set by credit rating companies, which are third-party institutions, based on their own survey results. These ratings assess the level of certainty and financial stability of the company itself and whether it pays the principal and interest of corporate bonds issued by the company as promised.
* Issuer credit ratings refer to the company's comprehensive ability to fulfill its obligations. The Senior unsecured debt ratings cover obligations of more than one year senior unsecured debt, while the short-term credit rating is for obligations of less than one year.
Credit Rating Transitions (Issuer Credit Ratings)
- JCR release about the issuer credit rating(BBB) on November 29, 2012
- R&I release about the issuer credit rating(BBB) on November 28, 2012
- Moody's announced Baa3 long-term issuer rating change to negative from stable on November 19, 2009.
- S&P upgraded the corporate credit rating from BB+ to BBB-, and the senior unsecured debt rating from BBB- to BBB on March 28, 2008.
Reasons for the rating
Abstract of JCR release (issued on November 29, 2012)
The reason for the rating is as follows:
- The Company revised the forecasts of the financial results for fiscal year ending March 31, 2013 downward in November 2012 due to fall in price of metal resources arising from European debt crisis and slowdown in economies in emerging countries such as China. Despite the downward revision, the Company will be able to ensure an ordinary income of 32 billion yen for fiscal year ending March 31, 2013. JCR thinks that there have been no significant changes to the fact that the Company has business bases in various business fields. While it has been making new investments continuously, these investments have not placed a large burden on the Company financially because it has also promoted asset replacement.
- The Company intends to reinforce its earnings base by allocating its management resources preferentially to the intensive business areas. JCR will watch closely future achievements.
- While the Company maintained the balance between risk assets and equity capital (risk assets/equity capital) at the end of September 2012, which stood at 1.0, at a level roughly equivalent to that figure at the end of March 2011 and end of March 2012, it will continue to face a task of improving equity capital and controlling risk assets.
Abstract of R&I release (issued on November 28, 2012)
Key Points relevant to Rating Decision
- It has a certain level of earnings base in business sectors such as Machinery, Chemicals and Consumer Lifestyle Business, as well as Energy & Metal.
- Thanks to its basic policy of making a new investment and at the same time carrying out a certain reshuffle of its asset portfolio, risk resilience is maintained at a level commensurate with the rating.
- Sojitz has been putting forth efforts to make business management more stable by, for example, tightening its risk control structure on an ongoing basis and raising the ratio of long-term borrowings on the funding front.
- Amid the deteriorating business environment, each business has been steadily bolstering the earnings base but this is not enough to offset a fall in profits among them. Thus, the overall earning capacity is not sufficient.
- In order to maintain and improve the rating, it is essential for Sojitz to boost the earnings base by achieving returns from existing investments and effectively reshuffling the asset portfolio.
Abstract of Moody's release (issued on November 19, 2009)
The rating outlook change for Sojitz to negative from stable reflects Moody's concern about the scale of the company's overall business investments in relation to its annual earnings streams, as well as earnings volatility in a stress environment.
Abstract of S&P release (issued on March 28, 2008)
The reason for the upgrade is as follows:
The balance between risk volume and risk buffers such as shareholders' equity, earnings shows a tendency of improvement, and the risk management system has been reinforced.
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