ANNOUNCEMENT DETAILS

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ANNOUNCEMENT DATE
:
04-Jan-2016
CATEGORY
:
RATING ANNOUNCEMENT
SUB-CATEGORY
:
RATING ANNOUNCEMENT
TITLE
:
RAM Ratings places ORIX Leasing on positive outlook
ISSUER NAME
:
ORIX LEASING MALAYSIA BERHAD, RAM RATING SERVICES BHD
DESCRIPTION
:
-
CONTENT
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RAM Ratings has reaffirmed the AA3/P1 ratings of ORIX Leasing Malaysia Berhad's (ORIX Leasing or the Company) CP/MTN Programme of up to RM500 million, with a positive outlook. Concurrently, we have reaffirmed the ratings of ORIX Leasing's Bank-Guaranteed MTN Programme of up to RM150 million and CP Programme of up to RM150 million at a respective AAA(bg)/Stable and P1. The AAA(bg) rating reflects the irrevocable and unconditional guarantee from Malayan Banking Berhad, rated AAA/Stable/P1 by RAM.

The positive outlook is premised on the better-than-expected improvement in the credit fundamentals of Japan-based ORIX Corporation (ORIX Corp or the Group), which wholly owns ORIX Leasing. ORIX Leasing's ratings are closely linked to ORIX Corp's credit strength given the Company's strategic importance to its parent. As such, we expect a high likelihood of financial support from ORIX Corp if the need arises. Notably, the Group has been demonstrating further improvement in its asset quality with the deleveraging of its real estate exposure progressing ahead of expectations.

Meanwhile, ORIX Leasing's asset quality remains healthy. Its gross impaired-financing (GIF) ratio had eased to 1.3% as at end-March 2015 (2014: 2.0%), aided by write-off on impaired legacy loans. Simultaneously, the Company's credit-cost ratio stood at a low 0.3%, with a robust GIF coverage ratio of 166%. Although there was an uptick in the Company's newly classified impaired loans, we expect its asset quality to hold up, thanks to its prudent credit culture and stringent monitoring procedures. As at end-June 2015, ORIX Leasing's capitalisation stayed strong, with a gearing ratio of 2.3 times.



Media contact
Liang Huey Jean
(603) 7628 1124
[email protected]



The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security's market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings' credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings' credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2016 by RAM Rating Services Berhad
ATTACHMENT
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SOURCE
:
BNM
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