USD1.5 billion EMTN program rated
Tokyo, August 30, 2016 -- Moody's Japan K.K. has assigned (P)A1 senior unsecured
and (P)P-1 short-term ratings to USD1.5 billion Euro
Medium Term Note (EMTN) program of Mitsubishi UFJ Securities Holdings
Co., Ltd. (MUSHD). This program is guaranteed
by The Bank of Tokyo-Mitsubishi UFJ, Ltd. The rating
outlook is stable.
The specific program newly rated is:
Issuer: Mitsubishi UFJ Securities Holdings Co., Ltd.
• USD1.5 billion senior unsecured EMTN program, effective
August 30, 2016
RATINGS RATIONALE
The (P)A1/(P)P-1 ratings assigned to MUSHD's EMTN program
reflects MUSHD's standalone credit strength that takes into consideration
factors such as its: (1) franchise as one of Japan's major domestic
securities companies; (2) franchise in retail customer assets;
and (3) adequate levels of liquidity and capital.
MUSHD's standalone credit assessment also reflects the challenges
that the company faces, such as: (1) its vulnerability to
capital market fluctuations; and (2) the relative weakness of its
equity and retail franchise when compared to larger domestic peers.
The aligned ratings of MUSHD and Mitsubishi UFJ Financial Group,
Inc. (MUFG) reflects Moody's view that MUFG and its major
subsidiaries including The Bank of Tokyo-Mitsubishi UFJ,
Ltd. (BTMU, A1 stable), Mitsubishi UFJ Trust and Banking
Corporation (MUTB, A1 stable) and MUSHD will benefit from the same
level of government support.
Underlying Moody's assessment is the announcement on 15 April 2016
by Japan's Financial Services Agency (FSA) of the framework for
the resolution of the country's three globally systemically important
banks (G-SIBs). In its announcement, the FSA explicitly
stated that it could take measures other than resolution and gave the
example of pre-emptive support.
Moody's believes that pre-emptive capital injections remain
the preferred method of Japanese regulatory authorities in maintaining
financial stability, and that Japanese regulatory authorities view
MUFG as a single financial institution for preemptive support considerations.
As a result, Moody's believes that all core MUFG entities—including
MUSHD and its subsidiaries —benefit equally from government support.
Moody's assesses the probability of government support for MUFG--the
largest banking group in Japan by consolidated assets--as
"very high", given MUFG's importance to Japan's
banking system.
What Could Change the Rating -- Up
An upgrade is unlikely over the next 12-18 months because MUSHD's
A1 ratings are at the same level as the sovereign rating.
What Could Change the Rating -- Down
Factors that could result in a downgrade of MUSHD's ratings include,
but are not limited to the following: (1) a downgrade of the sovereign
rating; or (2) a downgrade of MUFG's ratings.
The principal methodology used in these ratings was Global Securities
Industry Methodology (Japanese) published in July 2013. Please
see the Ratings Methodologies page on www.moodys.com for
a copy of this methodology.
Mitsubishi UFJ Securities Holdings Co., Ltd.,
headquartered in Tokyo, Japan, is a core subsidiary of Mitsubishi
UFJ Financial Group, Inc., which is the largest banking
group in Japan. Its major subsidiaries and affiliate include Mitsubishi
UFJ Morgan Stanley Securities Co., Ltd., MUFG
Securities EMEA plc, and Morgan Stanley MUFG Securities Co.,
Ltd.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this rating action, and
whose ratings may change as a result of this rating action, the
associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's Japan K.K. is a credit rating agency registered
with the Japan Financial Services Agency and its registration number is
FSA Commissioner (Ratings) No. 2. The Financial Services
Agency has not imposed any supervisory measures on Moody's Japan K.K.
in the past year.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Raymond Mark Spencer
Senior Vice President
Financial Institutions Group
Moody's Japan K.K.
Atago Green Hills Mori Tower 20fl
2-5-1 Atago, Minato-ku
Tokyo 105-6220
Japan
JOURNALISTS: 813-5408-4110
SUBSCRIBERS: 813-5408-4100
Graeme Knowd
MD - Banking
Financial Institutions Group
JOURNALISTS: 813-5408-4110
SUBSCRIBERS: 813-5408-4100
Releasing Office:
Moody's Japan K.K.
Atago Green Hills Mori Tower 20fl
2-5-1 Atago, Minato-ku
Tokyo 105-6220
Japan
JOURNALISTS: 813-5408-4110
SUBSCRIBERS: 813-5408-4100