Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.
21 Sep 1998
MOODY'S DOWNGRADES 4 JAPANESE FIRST-TIER GENERAL CONTRACTORS; KAJIMA, OBAYASHI, SHIMIZU AND TAISEI
Tokyo, 09-21-98 -- Moody's Investors Service downgraded the senior unsecured long-term debt ratings of four first-tier Japanese general construction companies: Kajima Corporation, to Baa3 from Baa1; Obayashi Corporation, to Baa2 from Baa1; Shimizu Corporation, to Baa3 from A3; and Taisei Corporation, to Ba1 from Baa2. The rating outlooks are stable.
The downgrades reflect continued substantial pressures on their earnings, high leverage, decreasing financial cushions, and Moody's concerns about potential further pressures on their asset quality under the deflationary state of the Japanese economy.
Japan's construction market is in a serious, protracted downswing. The rated first-tier contractors have been suffering business volume contraction and profit margin declines. Although the companies are cutting their costs by reducing overexpanded workforces and developing highly efficient construction methods, their cash flows will remain pressured due to weak construction demand from the private sector and the intense competition that results.
The government's policy of increasing public spending to boost the economy is unlikely to significantly improve the first-tier contractors' performances because they have relatively low dependence on public works.
In the first half of this year, Shimizu, Taisei and Kajima announced major asset disposition and write-off packages -- including real estate inventory, dubious receivables from customers, and unprofitable operations of group companies. Each company's aggregate write-offs were large enough to significantly erode their equity positions.
The modest profits expected over the medium term will slow down debt reduction and recovery in their equity positions. Amid growing uncertainty about Japan's economy and the financial system, their weakening capital structure is a significant concern, said Moody's.
The four companies have large marketable securities portfolios, consisting mostly of stock shares with sizable unrealized gains. However, Japan's weak stock market has slashed the values of their portfolios, and financial cushions in the portfolios have been reduced.
Moreover, Moody's is concerned that potential deflation in the Japanese economy may further deteriorate their asset quality, eroding their asset values and/or producing additional credit losses.
In the meantime, Moody's expects that the companies' established franchises and excellent technological backgrounds will sustain their competitive edges and minimize volatility of their operations. The companies have a long-term potential to enhance their market positions as the market requires higher efficiency, said Moody's.
Moody's downgraded Kajima's long-term debt rating to Baa3 from Baa1, and its supported subsidiary, Kajima Capital of America, Inc.'s debt rating to Ba1 from Baa2. The rating outlook is stable. The rating action concludes a review initiated on May 20, 1998.
The downgrade reflects significant deterioration of Kajima's financial profile as a result of its declining profit margins, its substantial asset write-offs, and its high debt. Kajima has a large overseas property investment portfolio, which has burdened Kajima's group-wide debt position and profitability.
Moreover, part of Kajima's domestic real estate inventory carries much higher book values than realizable values in the current market. Kajima plans to write off substantial parts of its unprofitable group operations and high-cost inventory during the fiscal year ending March 31, 1999, which will result in what the company estimates as a Yen 140 billion consolidated net loss for the term (approximately 38% of its equity as of March 31, 1998. Despite the company's policy to cut debt, mainly utilizing asset sales proceeds, the write-off will significantly impair its capital structure.
In the meantime, Moody's expects that Kajima's long-established private- and public-sector franchise and outstanding technological advantage will continue to sustain its competitive strength in the industry. Nonetheless, Kajima's equity position remains vulnerable to additional pressures on Japan's property market and economy, putting its rating at the low end of the investment grade spectrum.
Kajima Corporation, headquartered in Tokyo, is a leading general contractor in Japan, with a consolidated turnover of Yen 1.9 trillion for the fiscal year ending March 31,1998.
Moody's downgraded Obayashi and its supported subsidiary, Obayashi Finance International (Netherlands) B.V.'s long-term debt rating to Baa2 from Baa1. The rating outlook is stable. The rating action concludes a review since June 15, 1998.
The downgrade recognizes Obayashi's continued tough earnings environment, and Moody's expectation that a substantial debt reduction is unlikely over the intermediate term. Obayashi has demonstrated higher profit margins than its peers over the past several years because of its focus on project profitability. However, like its peers, its margins are pressured under intense market competition.
Due to its less-aggressive asset expansion during the property "bubble", Obayashi suffered smaller asset write-offs than its peers and has maintained acceptable asset quality.
Still, Obayashi is highly leveraged. Moody's expects that its total debt is unlikely to be reduced substantially in the medium term in light of pressures on cash flow from its fundamental operation and the expected moderate pace of its real estate inventory reduction. As a result, improvement in its debt-protection measurements will be constrained.
The rating also incorporates Obayashi's solid franchise primarily in Osaka's civil engineering market, its technological competitiveness in certain fields, and its reasonably conservative financial policies as reflected in its acceptable asset quality.
Obayashi Corporation, headquartered in Osaka, closed fiscal year ending March 31, 1998 with Yen 1.5 trillion consolidated sales.
Moody's downgraded Shimizu and its supported subsidiary, Shimizu Europe B.V.'s senior unsecured long-term debt rating to Baa3 from A3. The rating outlook is stable. The rating action concludes a review initiated on April 1, 1998.
The downgrade reflects Shimizu's significantly impaired capital position as a result of its major asset write-offs, its high debt position, and its weakening fundamental earnings.
Shimizu is implementing a major asset write-off package in the fiscal years ending March 31, 1998 and March 31, 1999, consisting of charge-off of dubious receivables for its construction works, disposition of real estate inventory, and write-down of its problematic domestic affiliates' operations. These write-offs, together with some other charges, will cause Yen 157 billion aggregate consolidated net losses for the two fiscal years (approximately 45% of its equity as of March 31, 1997), as the company estimates.
Shimizu had written off substantial amounts of its overseas investments and domestic real estate inventory since 1993. The additional major write-offs will significantly damage its capital position and will produce yet higher leverage.
Shimizu has a strong building construction operation, backed by its established franchise, technological strength, flexible market coverage, and effective cost management capabilities. However, building construction, mainly from the private sector, generally provides lower profit margins than public civil engineering projects, and is affected by economic conditions.
Shimizu's profit margin has significantly declined in the past several years and is still under pressure. Despite its policy of cutting total debt, Moody's does not expect substantial improvement in its debt-protection measurements in the medium term.
Shimizu Corporation, headquartered in Tokyo, is a leading general construction company is Japan, with a consolidated sales of Yen 1.8 trillion for the most recent fiscal year.
Moody's downgraded the long-term debt ratings of Taisei Corporation and its supported subsidiaries, Taisai Capital L.D.C. and Taisei Holland B.V., to Ba1 from Baa2. The rating outlook is stable. The rating action concludes a review started on June 15, 1998.
The downgrade reflects Moody's concerns about Taisei's high debt burden, erosion of its equity by asset write-offs, continued pressures on the value of its assets and equity, as well as earnings pressures on its fundamental operation and group operations.
In the fiscal year ending March 31, 1998, Taisei registered revaluation losses on its real estate inventory and wrote off dubious receivables, which resulted in Yen 67 billion consolidated net loss for the term (approximately 17% of its equity as of March 31, 1997) after tax allocation. Taisei carries a very high debt position to finance its group-wide operations, including substantial real-estate related operations.
Taisei's inability to reduce its debt position was exacerbated by the write-offs, which increased its high leverage even further. Although Taisei has a policy to substantially reduce consolidated debt over the next few years, its leverage is unlikely to be reduced to a moderate level in the medium term.
Furthermore, Moody's considers its group-wide real-estate related operations to be large relative to its peers, which will keep the company vulnerable to the weak real estate market in Japan until assets are greatly reduced. Such uncertainties will add to continued earnings pressures on Taisei's fundamental operations and some of its subsidiaries' operations.
Although Taisei is affiliated with the Fuyo Group, headed by Fuji Bank, Moody's notes that potential benefits from the group affiliation will be less sustainable than previously, now that the financial and industrial systems in Japan are changing. Still, Moody's expects that Taisei will maintain its distinguished franchise value and technological competitiveness from lower-tier industry players, and it has a long-term potential to enhance its industry position and earnings.
Taisei Corporation is headquartered in Tokyo. Its consolidated sales were Yen 1.8 trillion in the fiscal year ending March 31, 1998.
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com
under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.
Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.