JPY 20 billion of New Debt Securities Rated
Tokyo, February 09, 2011 -- Moody's Japan K.K. has assigned its Aa2 ratings to the bonds
issued by West Nippon Expressway Company Limited (W-NEXCO).
The rating outlook is stable.
This is a takedown from the company's JPY250 billion domestic shelf
registration (effective January 10, 2010), which is rated
(P)Aa2.
The specific bond issues rated are:
JPY 20 billion Series 10 bonds, due 2013
RATING RATIONALE
The rating reflects W-NEXCO's intrinsic strengths, which
include highly predictable cash flow from its toll road operations and
lease payments to Japan Expressway Holding and Debt Repayment Agency (JEHDRA,
rated Aa2), backed by the Japanese government's legislative and
contractual framework. The rating also incorporates the credit
support that Moody's believes the government would provide in a stressful
situation.
W-NEXCO is engaged in the management and operation of expressway
networks currently in service, and also in the construction of new
expressway routes in Western Japan. The network includes Japan's
such industrial highways as the Meishin Expressway and the Sanyo Expressway.
The company thereby plays an integral role in Japan's motorway infrastructure
policy.
W-NEXCO's operations are governed by related laws and agreements
with JEHDRA. The Ministry of Land, Infrastructure and Transport
(MLIT) is heavily involved in the development of the company's business
plans, as well as its construction of expressways, collection
of tolls, issuance of long-term debt and offerings of new
stock.
An upgrade of the sovereign rating would lead to upward rating pressure.
Moody's sovereign team says an upgrade would be contingent upon improvements
in the government debt trajectory and in economic growth.
A downgrade in the sovereign rating would trigger a downgrade.
Moody's sovereign team sees any downgrade contingent on a severe and protracted
deterioration in government finances; and erosions in government
debt affordability and the special characteristics of Japan's government
debt market.
The last rating action with respect to W-NEXCO was on July 22,
2009, when Moody's re-aligned 13 Japanese government-related
issuers' ratings to the same level as the Japanese Government Bonds (rated
at Aa2 for its local currency obligations).
The principal methodology used in this rating was "Government-Related
Issuers: Methodology Update" published on September 30,
2010, and available on www.moodys.co.jp.
West Nippon Expressway Company Limited was established on October 1,
2005, and is 100% owned by Japanese government. Its
headquarters are in Osaka.
REGULATORY DISCLOSURES
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, parties not involved in the ratings,
public information, confidential and proprietary Moody's information.
Measures taken to ensure the quality of this information include use of
public information, reviews by a third party and verification by
the lead analyst.
Moody's considers the quality of information available on the issuer
or obligations satisfactory for the purposes of assigning a credit rating.
Moody's adopts all necessary measures to ensure 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 parties. However, Moody's is not an auditor
and cannot in every instance independently verify or validate information
received in the rating process.
Credit ratings are 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. Credit
ratings do not address any other risk, including but not limited
to: liquidity risk, market value risk, or price volatility.
Credit ratings do not constitute investment or financial advice,
and credit ratings are not recommendations to purchase, sell,
or hold particular securities. No warranty, express or implied,
as to the accuracy, timeliness, completeness, merchantability
or fitness for any particular purpose of any such rating or other opinion
or information is given or made by Moody's in any form or manner whatsoever.
The credit risk of an issuer or its obligations is assessed based on information
received from the issuer or from public sources. Moody's may change
the rating when it deems necessary. Moody's may also withdraw the
rating due to insufficient information, or for other reasons.
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with the Japan Financial Services Agency and its registration number is
FSA Commissioner (Ratings) No. 2. The Financial Services
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Please see ratings tab on the issuer/entity page on the Moody's
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Tokyo
Kenji Okamoto
Vice President - Senior Analyst
Corporate Finance Group
Moody's Japan K.K.
JOURNALISTS: (03) 5408-4110
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Tokyo
Minoru Kubota
MD - Financial Institutions
Rating Group
Moody's Japan K.K.
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SUBSCRIBERS: (03) 5408-4100
Moody's Japan K.K.
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Moody's assigns Aa2 rating to West Nippon Expressway's bonds