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Rating Action:

Moody's assigns first-time A1 issuer rating to Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development; outlook stable

 The document has been translated in other languages

Global Credit Research - 26 Feb 2016

Tokyo, February 26, 2016 -- Moody's Japan K.K. has assigned an A1 local currency long-term issuer rating to Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN).

The rating outlook is stable.

This is the first time that Moody's has assigned a rating to JOIN.

RATINGS RATIONALE

JOIN's A1 issuer rating reflects its very strong linkage with the Government of Japan (GoJ, A1 stable).

The creditworthiness of JOIN reflects that of the sovereign, given JOIN's role in supporting an important GoJ policy initiative, as well as the very high level of credit support from and the heavy involvement of the GoJ in its operations.

In October 2014, JOIN was established under the legislation on the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN Act) as a government-private sponsored fund to promote Japan's infrastructure system in overseas markets, as part of the "Japan Revitalization Strategy" of achieving JPY30 trillion in infrastructure orders by 2020.

The JOIN Act stipulates that the GoJ must at all times hold at least half of the total number of shares that JOIN has issued. As of end-January 2016, JOIN was 71.6% owned by the GoJ, with the remaining shares held by Japanese private-sector corporates and industrial associations. The GoJ's ownership of JOIN's shares will increase further from the current 71.6%, because the GoJ's equity contributions to JOIN will increase in line with an increase in the project in which JOIN invests.

The JOIN Act also states that the GoJ must endeavor to take necessary financial and other measures to support JOIN's operations. Moody's notes that the GoJ provides explicit guarantees for JOIN's bonds or borrowings, as well as equity contributions to JOIN when needed.

JOIN's role is to support and facilitate Japanese corporations to participate in the global infrastructure market, mainly by: (1) providing equity to infrastructure projects overseas; (2) negotiating and discussing with the government of the country in question to mitigate foreseeable investment risks for the Japanese corporates involved; and (3) providing technical support through human resource secondment.

Moody's says that the level of integration between JOIN and the GoJ is so strong that a standalone credit analysis is not meaningful for JOIN. Moody's has therefore decided not to assign a baseline credit assessment for JOIN.

What Could Change the Rating -- Up

An upgrade of the sovereign rating.

What Could Change the Rating -- Down

Factors that could result in a downgrade include, but are not limited to:

1. A downgrade of the sovereign rating; or

2. Any change that would result in lower financial support from the GoJ, or weaken JOIN's very strong relationship with the GoJ.

The principal methodology used in this rating was Government-Related Issuers (Japanese) published in November 2014. Please see the Ratings Methodologies page on www.moodys.com for a copy of this methodology.

Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development, headquartered in Tokyo, is a government-private sponsored fund in Japan established in October 2014 to promote infrastructure exports, which is one of the most important initiatives for the Government of Japan.

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 credit rating action on the support provider and in relation to each particular credit 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 credit rating action, and whose ratings may change as a result of this credit 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.

Tetsuya Yamamoto
Vice President - Senior Analyst
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

Moody's assigns first-time A1 issuer rating to Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development; outlook stable
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