Tokyo, May 31, 2011 -- Delete Mitsubishi UFJ Trust and Banking Corporation's A3 senior debt rating
in the list of the affected ratings. Revised release follows.
Moody's Japan K.K. has today taken the following rating
actions on Japanese banks, including their keep-well letter-supported
subsidiaries, subsequent to Moody's decision to place the
Aa2 ratings of the government of Japan on review for possible downgrade.
RATINGS RATIONALE
(i) Review for possible downgrade the long-term deposit and debt
ratings of all Japanese banks, including their keep-well
letter-supported subsidiaries;
(ii) Review for possible downgrade the short-term deposit and debt
ratings of selected Japanese banks, including their keep-well
letter-supported subsidiaries.
A list of the affected ratings can be found at the end of this press release.
The review for possible downgrade affects all Japanese bank ratings that
benefit from any form of systemic support uplift.
In this respect, deposit and debt ratings that benefit from uplift
due to systemic support may be negatively affected by either:
(i) a weakening in the government of Japan's creditworthiness; or
(ii) a potential reduction in the likelihood that the Japanese government
would support Japanese banks, in case of need, although Moody's
believes that the incentive for the government to continue providing support
-- within its capacity -- remains strong.
Over the course of the review period, Moody's will assess the extent
to which a potentially lower-rated government would be able to
support its banking system, in case of need, and to the extent
captured in current ratings.
In the case of Japan's banking system, Moody's notes
that the amount of uplift in some existing ratings is high, when
seen in a global context, and reflects the historic support that
has occurred, as well as the presence of a framework that allows
the government to act quickly to provide capital to troubled banks.
The Bank of Japan has also historically acted promptly to provide liquidity
to the system, when required, most recently in the environment
following the March 11 earthquake.
Nevertheless, Moody's is concerned that, as fiscal pressures
continue to build for the government, it may be increasingly difficult
to expect it to be able to provide support at those levels seen historically.
Risks are increasing that hard choices will have to be made in the future
between protecting the government's own balance sheet and providing
significant levels of support to a banking system at a time of stress.
In this context, Moody's notes recent events surrounding The
Tokyo Electric Power Company, Incorporated (long-term debt
rating of Baa2 on review for possible downgrade) -- the operator
of the troubled Fukushima Daiichi Nuclear Power Station -- and which
highlight the increasing pressures faced by the government as it seeks
to balance growing fiscal and political challenges and address the needs
of large, systemically important institutions that require support.
The review will also consider the ongoing negative outlook for the Japanese
banking system, and the small, but growing, risk that
pressures on the sovereign will ultimately spill over into the broader
macro-economic environment; thereby impacting in turn bank
asset quality and ultimately bank standalone financial strength ratings.
For example, a rise in government yields could carry significant
implications for the valuations of the large amounts of government bonds
held in the banking system. In addition, such a rise in yields,
if material, would likely increase asset quality pressures for the
banks' broader loan books.
Looking ahead, Moody's believes that the profitability of the banks
will remain weak, given the country's difficult economic conditions,
long-term structural challenges, and the competitive nature
of the banking environment. As such, capital regeneration
is a long- term challenge for the banking sector in Japan,
leaving the banks less able to manage unexpected and large losses without
external support or further capital raisings.
In reviewing the long-term deposit and senior debt ratings,
Moody's will take into account the conclusion of the review of the sovereign
rating.
As the banks' subordinated ratings are also impacted by a change in the
senior debt ratings and current support assumptions, Moody's has
also placed these ratings on review for possible downgrade, together
with the short-term deposit and debt ratings.
However, the preferred stock ratings for those preferred securities
issued by the special purpose corporations of large Japanese banks are
not on review as these ratings do not incorporate any expectation of systemic
support.
Please see ratings tab on the issuer/entity page on the Moody's website
for the last rating action and the rating history.
The principal methodologies used in this rating were Moody's Bank Financial
Strength Ratings: Global Methodology and Incorporation of Joint-Default
Analysis into Moody's Bank Ratings: A Refined Methodology published
on September 30, 2010, and available on www.moodys.co.jp.
List of the affected ratings are as follow (includes prospective ratings
on shelf registrations/programs where applicable).
Mitsubishi UFJ Securities Holdings Co., Ltd.:
A1 issuer rating and Prime-1 issuer rating
Mitsubishi UFJ Securities (HK), Ltd.: Aa3 long-term
Deposit Note/CD Program
Mitsubishi UFJ Securities International plc: Aa3 issuer rating,
Aa3 senior debt rating, and A1(hyb) subordinated debt rating
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.:
Aa3 issuer rating
Mitsubishi UFJ Trust and Banking Corporation: Aa2 long-term
deposit rating
Mitsubishi UFJ Trust International, Ltd.: Aa3 issuer
rating
Bank of Tokyo-Mitsubishi UFJ, Ltd.: Aa2 issuer
rating, Aa2 long-term deposit rating, Aa2 senior unsecured
rating, Aa3 senior subordinated debt rating, Aa3 subordinated
debt rating, and A1(hyb) junior subordinated debt rating
Bank of Tokyo-Mitsubishi UFJ Ltd., Hong Kong Branch:
Aa2 long-term Deposit Note/CD Program
BTMU (Curacao) Holdings N.V.: Aa2 senior debt rating,
Aa3 subordinated debt rating, and A1(hyb) junior subordinated debt
rating
Bank of Tokyo-Mitsubishi UFJ, Ltd., Sydney Branch:
Aa2 long-term Deposit Note/CD Program
Bank of Tokyo-Mitsubishi UFJ, Ltd., New York
Branch: Aa3 subordinated debt rating
UFJ Finance Aruba A.E.C.: Aa3 subordinated
debt rating
Sumitomo Mitsui Banking Corporation: Aa2 long-term deposit
rating, Aa2 senior debt rating, Aa3 subordinated debt rating,
and A1(hyb) junior subordinated debt rating
Sumitomo Mitsui Banking Corporation, New York Branch: A1(hyb)
junior subordinated debt rating
SMBC Capital Markets, Inc.: Aa2 senior debt rating
SMBC International Finance N.V.: Aa3 subordinated
debt rating and A1(hyb) junior subordinated debt rating
Sumitomo Mitsui Banking Corporation Europe Ltd.: Aa2 long-term
deposit rating
SMBC Nikko Securities Inc.: Aa3 issuer rating and Aa3 senior
debt rating
Mizuho Financial Group, Inc.: Prime-1 short-term
debt rating
Mizuho Bank, Ltd.: Aa3 issuer rating, Aa3 long-term
deposit rating, Aa3 senior debt rating, A1 senior subordinated
debt rating, and A2 (hyb) junior
subordinated debt rating
Mizuho Corporate Bank, Ltd.: Aa3 issuer rating,
Aa3 long-term deposit rating, Aa3 senior debt rating,
A1 senior subordinated debt rating, and A2 (hyb) junior subordinated
debt rating
Mizuho Corporate Asia (HK) Limited: Aa3 senior debt rating
Mizuho Corporate Bank Nederland N.V.: Aa3 senior debt
rating
Mizuho Corporate Bank, Ltd. Hong Kong Branch: Aa3 long-term
deposit rating
Mizuho Corporate Bank, Ltd. Paris Branch: Aa3 long-term
deposit rating
Mizuho Corporate Bank, Ltd. Sydney Branch: Aa3 senior
debt rating
Mizuho Finance (Aruba) A.E.C.: A1 senior subordinated
debt rating, and A2 (hyb) junior subordinated debt rating
Mizuho Finance (Cayman) Limited: A1 senior subordinated debt rating,
and A2 (hyb) junior subordinated debt rating
Mizuho Finance (Curacao) N.V.: Aa3 senior debt rating,
A1 senior subordinated debt rating, and A2 (hyb) junior subordinated
debt rating
Mizuho International plc: A1 senior debt rating, and Prime-1
short-term debt rating
Mizuho Securities Co., Ltd.: A1 senior debt
rating, and Prime-1 short-term debt rating
Mizuho Securities USA Inc.: A1 senior debt rating,
and Prime-1 short-term debt rating
Mizuho Financial Group (Cayman) Limited: A1 senior subordinated
debt rating, and A2 (hyb) junior subordinated debt rating
Mizuho Trust & Banking Co., Ltd.: Aa3 long-term
deposit rating, Aa3 senior debt rating, A1 senior subordinated
debt rating, and A2 (hyb) junior subordinated debt rating
Mizuho TB (Aruba) A.E.C.: A1 senior subordinated
debt rating
Trust & Custody Services Bank, Ltd.: Aa3 long-term
deposit rating
Resona Holdings, Inc.: A3 senior subordinated debt
rating, and Baa1 (hyb) junior subordinated debt rating
Resona Bank, Ltd.: A1 long-term deposit rating,
A2 senior subordinated debt rating, A3 (hyb) junior subordinated
debt rating, and Prime-1 shortterm
debt rating
Saitama Resona Bank, Ltd.: A1 long-term deposit
rating, A2 senior subordinated debt rating, A3 (hyb) junior
subordinated debt rating, and
Prime-1 short-term debt rating
Kinki Osaka Bank, Ltd.: A1 long-term deposit
rating, and Prime-1 short-term debt rating
Daiwa International Finance (Cayman) Ltd.: A2 senior subordinated
debt rating
Daiwa PB Limited: A3 (hyb) junior subordinated debt rating
Asahi Finance (Cayman) Ltd.: A2 senior subordinated debt
rating, and A3 (hyb) junior subordinated debt rating
Sumitomo Trust And Banking Co. Ltd.: Aa3 long-term
deposit rating, Aa3 senior debt rating, A1 senior subordinated
debt rating, and A2 (hyb) junior subordinated debt rating
Sumitomo Trust & Banking Co. (U.S.A.):
Aa3 long-term deposit rating
STB Finance Cayman Ltd.: A1 senior subordinated debt rating,
and A2 (hyb) junior subordinated debt rating
Chuo Mitsui Trust & Banking Co., Ltd.: A1
long-term deposit rating, A2 senior subordinated debt rating,
A3 (hyb) junior subordinated debt rating, and Prime-1 short-term
debt rating
Chuo Mitsui Asset Trust and Banking Co, Ltd.: A1 long-term
deposit rating, and Prime-1 short-term debt rating
Japan Trustee Services Bank, Ltd.: Aa3 long-term
deposit rating
Shinsei Bank, Limited.: Baa3 long-term deposit
rating, Baa3 senior debt rating, Ba1 senior subordinated debt
rating, Ba2 (hyb) junior
subordinated debt rating, and Prime-3 short-term debt
rating
Aozora Bank, Ltd.: Baa1 long-term deposit rating,
Baa1 senior debt rating, and Prime-2 short-term debt
rating
Shinkin Central Bank: Aa3 long-term deposit rating
The Norinchukin Bank: Aa3 issuer rating, Aa3 long-term
deposit rating, and Aa3 senior unsecured rating
The Chiba Bank, Ltd.: A1 issuer rating, A1 long-term
deposit rating, A2 senior subordinated debt rating, and Prime-1
short-term debt rating
The Shizuoka Bank, Ltd.: Aa3 issuer rating, Aa3
long-term deposit rating, and Aa3 senior debt rating
The Higo Bank, Ltd.: A1 long-term deposit rating
and Prime-1 short-term debt rating
The Gunma Bank, Ltd.: A1 issuer rating, A1 long-term
deposit rating, and Prime-1 short-term debt rating
The Joyo Bank, Ltd.: A1 long-term deposit rating,
A1 senior debt rating, and Prime-1 short-term debt
rating
The Bank of Yokohama, Ltd.: A1 long-term deposit
rating and Prime-1 short-term debt rating
The Minato Bank, Ltd.: Aa2 long-term deposit
rating, Aa3 senior subordinated debt rating, and Prime-1
short-term debt rating
The Hiroshima Bank, Ltd.: A3 long-term deposit
rating
The Chugoku Bank, Limited: Aa3 issuer rating and Aa3 long-term
deposit rating
Kansai Urban Banking Corporation: Aa2 long-term deposit rating,
Aa3 senior subordinated debt rating, A1(hyb) junior subordinated
debt rating, and Prime-1 short-term debt rating
The Ogaki Kyoritsu Bank, Ltd.: A3 long-term
deposit rating
The Hyakujushi Bank, Ltd.:A2 long-term deposit
rating and Prime-1 short-term debt rating
The San-in Godo Bank, Ltd.: A2 long-term
deposit rating and Prime-1 short-term debt rating
The Daishi Bank, Ltd.: A2 long-term deposit
rating and Prime-1 short-term debt rating
The Bank of Fukuoka, Ltd.: A3 issuer rating and A3
long-term deposit rating
Suruga Bank, Ltd.: A3 long-term deposit rating
The Kiyo Bank, Ltd.: Baa1 long-term deposit
rating and Prime-2 short-term debt rating
Moody's will be hosting the following investor teleconferences in support
of the above rating action(s) on Wednesday June 1:
- For Asia (in English): 14:00 HKT, 15:00
JST; 16:00 EST
- For Japan (in Japanese): 15:00 HKT, 16:00
JST; 17:00 EST
- For EMEA/Americas (in English): 07:00 PDT; 10:00
EDT, 15:00 BST, 16:00 CET
Please register for these events at www.moodys.com/events
or email: [email protected]
Tokyo
Mutsuo Suzuki
Senior Vice President - Regional Credit Officer
Financial Institutions Group
Moody's Japan K.K.
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
Tokyo
Minoru Kubota
MD - Financial Institutions
Financial Institutions Group
Moody's Japan K.K.
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
Moody's Japan K.K.
Atago Green Hills Mori Tower 20fl
2-5-1 Atago, Minato-ku
Tokyo 105-6220
Japan
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
CORRECTION TO TEXT, TODAY'S RELEASE: Moody's takes actions on rated Japanese banks further to sovereign rating review
