MOODY'S PLACES DKB UNDER REVIEW FOR POSSIBLE DOWNGRADE
Tokyo, 09-16-98 -- Moody's Investors Service placed Dai-Ichi Kangyo Bank's credit ratings and bank financial ratings under review for possible downgrade. The review was prompted by Moody's growing concerns that the continuously deteriorating operating environment may further affect DKB's asset quality and profit generating power.
The ratings of the CIT Group, Inc. are not affected by this rating action.
The Japanese banking sector has been experiencing unprecedented pressure as the credit environment has rapidly deteriorated and the market's concerns over the Japan's banking crisis intensifies, Moody's said. In the midst of the current banking crisis, DKB's capital cushion is thinning in light of the volatile equity market movements. Moody's is concerned that the current adverse economic condition, coupled with the diminished support capacity of Japanese main banks, could seriously impair the fundamentals of already weakened sectors. Furthermore, the persistent economic sluggishness has notably impacted Japanese corporations' financial health in general, Moody's noted.
The rating agency will assess the level of risks that DKB is facing in association with problematic borrowers, both domestic and international, and their impact on DKB's financial fundamentals. According to Moody's, DKB has relatively high exposures to the construction, real estate and nonbank sectors. Moody's will also examine DKB's credit risk management capabilities and the bank's plans for improving its capital position and profitability.
The following ratings were placed under review for possible downgrade:
Dai-Ichi Kangyo Bank, Ltd. -- the A3 long-term deposit rating, the Prime-2 short-term rating, the A3 long-term senior debt rating, the Baa1 subordinated debt rating, the Baa2 junior subordinated debt rating, and the D financial strength rating.
DKB Asia Limited -- the A3 long-term senior debt rating and Prime-2 short-term rating.
DKB Finance (Aruba) A.E.C. -- the Baa1 subordinated debt rating and Baa2 junior subordinated debt rating.
DKB International PLC -- the A3 long-term senior debt rating and Prime-2 short-term rating.
Dai-Ichi Kangyo Australia Limited -- the A3 senior debt rating and Prime-2 short-term and commercial paper ratings.
Dai-Ichi Kangyo Bank, Cayman Branch -- the Prime-2 short-term deposit rating.
Dai-Ichi Kangyo Bank (Deutschland) AG -- the A3 senior debt rating and Prime-2 short-term rating.
Dai-Ichi Kangyo Bank (Luxembourg) S.A. -- the A3 long-term senior debt rating and Prime-2 short-term rating.
Dai-Ichi Kangyo Bank Nederland NV -- the A3 long-term senior debt rating and Prime-2 short-term rating.
Dai-Ichi Kangyo Bank, Paris Branch -- the A3 long-term deposit rating, and the Prime-2 short-term deposit rating.
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