ANNOUNCEMENT DETAILS

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ANNOUNCEMENT DATE
:
19-Dec-2017
CATEGORY
:
RATING ANNOUNCEMENT
SUB-CATEGORY
:
RATING ANNOUNCEMENT
TITLE
:
ORIX Leasing Malaysia Berhad
ISSUER NAME
:
ORIX LEASING MALAYSIA BERHAD
DESCRIPTION
:
-
CONTENT
:
RAM Ratings has reaffirmed the respective AA2/Stable/P1 and AA2/Stable ratings of ORIX Leasing Malaysia Berhad's (the Company) CP/MTN Programme of up to RM500 million (2013/2020) and MTN Programme of up to RM500 million (2016/2031). The reaffirmation reflects our anticipation of ready parental support from ORIX Corporation (ORIX Corp or the Group) in times of need, given the Company's strategic importance to the Group. ORIX Corp's credit profile has remained intact, as represented by its stronger earnings, comfortable gearing and satisfactory asset-quality indicators despite some uptick in credit costs. 

ORIX Leasing's asset quality stayed healthy as at end-June 2017, with a gross impaired-financing ratio of 1.2%, underpinned by the Company's prudent underwriting and monitoring. The Company posted net impairment write-backs in fiscal 2017 and 1Q fiscal 2018, the result of its smaller base of receivables and recoveries in the previous financial year. ORIX Leasing had revised its policy on general provisions in July 2017, which pushed its loan-loss reserve coverage down to 104% as at end-July 2017 (end-March 2017: 181%); the Company intends to maintain a minimum coverage of 100% going forward.

ORIX Leasing's financing portfolio has been contracting in the last 2 fiscal years, given the lacklustre demand for industrial equipment financing amid uneven economic growth and keener competition. Nonetheless, a small growth achieved in 2Q FY Mar 2018 has offered it some respite. Given its muted receivables growth, the Company's gearing ratio remained low at 1.3 times as at end-June 2017. Notably, ORIX Leasing stands among the most profitable non-bank financial institutions in RAM's rated portfolio, with a return on asset of 4.6% in FY Mar 2017. 

 

Analytical contact
Loh Kit Yoong
(603) 7628 1031
[email protected]

Media contact
Padthma Subbiah
(603) 7628 1162
[email protected]

 

The credit rating is not a recommendation to purchase, sell or hold 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 2017 by RAM Rating Services Berhad

*** DISCLAIMER ***
THIS COMPUTER SYSTEMS AND APPLICATIONS ARE OWNED AND OPERATED BY BURSA MALAYSIA.
ATTACHMENT
:
-
SOURCE
:
BURSA
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