JPY 200 billion in shelf registration and JPY 10 billion of the senior unsecured debt rated
Tokyo, March 11, 2016 -- Moody's Japan K.K. has assigned a (P)A3 rating to the domestic
shelf registration of Mitsui Fudosan Co., Ltd. (Mitsui
Fudosan) and an A3 rating to the senior unsecured debt, which is
a takedown from the shelf registration. At the same time,
both shelf registration and the debt are placed under review for upgrade.
• JPY 200 billion domestic shelf registration (effective April 1,
2015) at (P)A3, review for upgrade
• JPY 10 billion Series 49 senior unsecured bonds, due 2046
at A3, review for upgrade
RATINGS RATIONALE
Mitsui Fudosan's A3 rating reflects the company's solid cash
flow generation from its property and business portfolio, underpinned
by its strong market position in a wide range of real estate businesses.
The review of the ratings reflects Moody's view that the cash flow from
each of the company's three business segments -- leasing, property
sales, and property management -- is growing steadily,
and that the company's ability to generate steady cash flows will
further strengthen.
In addition, Mitsui Fudosan's adjusted debt/EBITDA and adjusted
debt/gross assets ratios have improved following its receipt of equity
financing of about JPY330 billion in 2014.
Moody's expects that Mitsui Fudosan's debt will increase from about JPY2.0
trillion as of the fiscal year ended March 2015, given planned large
project investments over the next few years.
However, Moody's also expects that Mitsui Fudosan will maintain
its stable financing ability and conservative approach to financial management.
In October 2015, Mitsui Fudosan announced that some foundation piles
for a condominium building in the city of Yokohama were faulty.
These condominiums had been sold by Mitsui Fudosan Residential Co.,
Ltd. (unrated), a wholly owned subsidiary of Mitsui Fudosan.
There is a risk that Mitsui Fudosan Residential will have to pay compensation
costs after discussion with other parties, including the construction
company. However, the extent of such compensation,
if any, remains uncertain.
In Moody's view, it is unlikely that any compensation payable,
even if substantial, will significantly increase Mitsui Fudosan's
credit risk. In its review, Moody's will also monitor the
impact of the incident, including the impact on the long-term
outlook for the company's residential business.
The principal methodology used in these ratings was Global Rating Methodology
for REITs and Other Commercial Property Firms (Japanese) published in
October 2010. Please see the Ratings Methodologies page on www.moodys.com
for a copy of this methodology.
Headquartered in Tokyo, Mitsui Fudosan Co., Ltd.
is the largest real estate operator in Japan by revenue. It engages
in a broad range of property-related businesses, including
leasing, property development, real estate brokerage,
hotel and leisure operations, housing construction, and investment
consulting.
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.
Akifumi Fukushi
Vice President - Senior Analyst
Structured Finance 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
Kei Kitayama
MD - Asia-Pac Structured Fin
Structured Finance 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
Moody's assigns (P)A3 to Mitsui Fudosan's shelf registration and A3 sr debt; reviews for upgrade