JPY1 billion of Series 119 notes affected
Tokyo, November 25, 2011 -- Moody's SF Japan K.K has confirmed its rating on the Series 119
credit-linked notes issued under the Euro MTN Program of SMBC Nikko
Securities Inc. The rating action follows the confirmation of the
rating of the reference obligation.
Moody's SF Japan K.K. is a registered credit rating agency
under the Financial Instrument and Exchange Act but not a Nationally Recognized
Statistical Rating Organization ("NRSRO"). Therefore the credit
ratings assigned by Moody's SF Japan K.K. are Registered
Credit Ratings to the FSA but are not NRSRO Credit Ratings.
The complete rating action is as follows:
JPY 1 billion Series 119 Credit Linked Notes, confirmed at A3;
Previously on October 11, 2011, assigned a definitive rating
of A3 and placed under review for possible downgrade
Issuer: SMBC Nikko Securities Inc. (Long-term issuer
rating: A1)
Coupon: Fixed
Payment Frequency of Coupon: Semi-annually
Issue Date: October 11, 2011
Scheduled Maturity Date: January 11, 2017
Reference Entity: a Japanese financial institution
Reference Obligation: Dated subordinated debt (Senior subordinated
debt rating: A2)
Arranger: SMBC Nikko Securities Inc.
RATING RATIONALE
The rating action follows the confirmation of the rating of the reference
obligation on November 24, 2011. Moody's had kept the notes
on review for possible downgrade because the reference obligation was
on review for possible downgrade.
The notes are credit-linked notes issued under the Euro MTN Program
of the issuer (Senior Unsecured Medium Term Note Program rating:
A1), and reference the reference obligation.
The terms of the notes specify the senior, unsubordinated and unsecured
status of the notes.
When a credit event for the reference obligation occurs, the redemption
amount of the notes will be subject to final price of the reference obligation
and unwind cost.
The rating on the notes is based mainly on the credit quality of the issuer
and the credit quality of the reference obligation.
If the rating on the issuer or the reference obligation changes,
the rating on the notes can also change.
The principal methodology used in this rating was "Moody's Approach to
Rating Repackaged Securities", published on September 30,
2010, and available on www.moodys.co.jp.
REGULATORY DISCLOSURES
The Global Scale Credit Rating on this press release that is issued by
one of Moody's affiliates outside the EU are endorsed by Moody's
Investors Service Ltd., One Canada Square, Canary Wharf,
London E 14 5FA, UK, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that has issued a particular Credit Rating is available on www.moodys.com.
The credit rating addresses the expected loss posed to the Notes which
are considered structured finance products in Japanese law. This
transaction is not instruments to which Moody's applies its (sf)
structured finance indicator. For the application of the (sf) indicator
and the explanation of meaning and limitation of the credit rating on
structured finance instruments, please see "Moody's
Structured Finance Rating Scale" on www.moodys.com.
The principal information used to prepare the credit rating comprised
contracts.
Information sources used to prepare the credit rating are the following:
parties involved in the rating (the Arranger); public information;
and confidential and proprietary Moody's information.
Measures taken to ensure the quality of this information include representations
and warranties.
Moody's considers the quality of information available on the issuer or
obligation satisfactory for the purposes of maintaining a credit rating.
Moody's adopts all necessary measures so 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-party sources. 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.
Moody's SF Japan K.K. is a credit rating agency registered
with the Japan Financial Services Agency and its registration number is
FSA Commissioner (Ratings) No. 3. The Financial Services
Agency has not imposed any supervisory measures on Moody's SF Japan K.K.
in the past year.
Please see ratings tab on the issuer/entity page on the Moody's website
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Credit Ratings were fully digitized and accurate
data may not be available. Consequently, Moody's provides
a date that it believes is the most reliable and accurate based on the
information that is available to it. Please see the ratings disclosure
page on the Moody's website for further information.
Please see the Credit Policy page on the Moody's website for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
Daisuke Kitazawa
Asst Vice President - Analyst
Structured Finance Group
Moody's SF Japan K.K.
Atago Green Hills Mori Tower 20fl
2-5-1 Atago, Minato-ku
Tokyo 105-6220
Japan
JOURNALISTS: (03) 5408-4220
SUBSCRIBERS: (03) 5408-4210
Yusuke Seki
Associate Managing Director
Structured Finance Group
JOURNALISTS: (03) 5408-4220
SUBSCRIBERS: (03) 5408-4210
Releasing Office:
Moody's SF Japan K.K.
Atago Green Hills Mori Tower 20fl
2-5-1 Atago, Minato-ku
Tokyo 105-6220
Japan
JOURNALISTS: (03) 5408-4220
SUBSCRIBERS: (03) 5408-4210
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