S&P Lowers Daiwa, Nikko Securities L-T Rtgs to BBB+.TOKYO--(BUSINESS WIRE)--Standard & Poor's CreditWire 2/26/98-- Standard & Poor's today lowered its long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and counterparty Counterparty The other participant, including intermediaries, in a swap or contract. ratings on Daiwa Securities Co. Ltd. and Nikko Securities Co. Ltd. and related entities to triple-'B'-plus from single-'A'-minus (please see rating list below). The long-term ratings of Daiwa International Trust Bank Ltd. and Daiwa Securities Trust are lowered, reflecting their close business relationships with, and support from, the parent. In addition, the short-term counterparty and CD ratings of Nikko Bank (U.K.) PLC are lowered to 'A-3' from 'A-2'. The long and short-term ratings of Nikko Securities and related entities are removed from CreditWatch, where they were placed on Nov. 14, 1997. The outlooks for the long-term ratings of both Daiwa and Nikko and related entities are negative. The rating actions reflect greater-than-expected pressure on the brokerages' financial performances as a result of weak market conditions and regulatory sanctions Sanctions is the plural of sanction. Depending on context, a sanction can be either a punishment or a permission. The word is a contronym. Sanctions involving countries: Asian nation country, land, state - the territory occupied by a nation; "he returned to the land of his birth"; "he visited several European countries" , liberalization lib·er·al·ize v. lib·er·al·ized, lib·er·al·iz·ing, lib·er·al·iz·es v.tr. To make liberal or more liberal: "Our standards of private conduct have been greatly liberalized . . . of stock brokerage commissions, and intensifying in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: competition from foreign firms as well as local banks. After posting losses of Y116.7 billion in fiscal 1996 (ended March 31, 1997) on a consolidated basis, Nikko is expected to see further losses in fiscal 1997. Commission revenue has dropped in the wake of a payoff scandal, which has resulted in administrative sanctions and damaged the brokerage's reputation. Nikko also has suffered losses on holdings of securities of Asian issuers. In addition, Nikko has not been successful in curtailing fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). or restructuring unprofitable overseas operations, and remains less diversified diversified (di·verˑ·s than its peers. Nevertheless, Nikko's credit quality is supported by its adequate levels of capital and liquidity and strong market position. Daiwa also is expected to record losses for a second consecutive year in fiscal 1997. The firm's share of industrywide in·dus·try·wide adv. & adj. Throughout an entire industry: sales that have decreased industrywide; industrywide cooperation. commission revenue has fallen in the wake of the payoff scandals, while its exposure to securities of Asian issuers is likely to result in valuation losses. The firm will also provide financial support of about Y47 billion to Daiwa Real Estate, which has unrecognized losses on its inventory. Daiwa Securities' ratings are supported, however, by its leading market position in the domestic capital market, a relatively diversified revenue base among domestic peers, and adequate levels of capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. and liquidity. --CreditWire -0-
RATINGS REVISED TO FROM
Daiwa Securities Co.,Ltd.
Counterparty credit rtg BBB+/Negative/A-2 A-/Negative/A-2
Sr unsecd BBB+ A-
Daiwa International Trust Bank Ltd.
Counterparty credit rtg BBB+/Negative/A-2 A-/Negative/A-2
CD BBB+/A-2 A-/A-2
Daiwa Securities Trust Co.
Counterparty credit rtg BBB+/Negative/A-2 A-/Negative/A-2
Nikko Securities Co. Ltd.
Counterparty credit rtg BBB+/Negative/A-2 A-/Watch Neg/A-2
Nikko Europe PLC
Counterparty credit rtg --/--/A-2 --/Watch Neg/A-2
Euro CP prog A-2 A-2/Watch Neg
Nikko Bank (U.K.) PLC
Counterparty credit rtg --/--/A-3 --/Watch Neg/A-2
UK200 mil CD prog
(support Nikko Securities Co. Ltd.)
--/A-3 --/Watch Neg/A-2
RATINGS AFFIRMED
Daiwa Europe Ltd.
Counterparty credit rtg --/--/A-2
Euro CP prog
(gtd. Daiwa Securities Co. Ltd.)
A-2
Daiwa America Corp.
Counterparty credit rtg --/--/A-2
CP prog
(gtd. Daiwa Securities Co. Ltd.)
A-2
CONTACT: Naoko Nemoto, Tokyo (81) 3-3593-8720 Jake Newman, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (1) 212-208-1589 For more information on criteria or subscriptions: http://www.ratings.standardpoor.com |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion