S&P Lowers Mitsubishi Trust to 'BBB'; Off CreditWatch.TOKYO--(BUSINESS WIRE)--Standard & Poor's CreditWire 7/30/98-- Standard & Poor's today lowered its long-term senior debt, certificate of deposit, and counterparty Counterparty The other participant, including intermediaries, in a swap or contract. ratings on Mitsubishi Trust & Banking Corp. (Mitsubishi Trust) to triple-'B' from single-'A'-minus and lowered the bank's short-term counterparty and CD ratings to 'A-3' from 'A-2'. The ratings were removed from CreditWatch, where they were placed with negative implications on June 18, 1998. The outlook on the long-term ratings is stable. Dependent ratings relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc issues supported by letter of credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing that are affected by this downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. will be forthcoming. The downgrade reflects the expectation of further large loan losses, stemming from Mitsubishi Trust's heavy exposure to several fragile sectors of the Japanese economy, which would likely erode Erode (ĕrōd`), city (1991 urban agglomeration pop. 361,755), Tamil Nadu state, S India, on the Kaveri River. The city is located in a cotton-growing region, and its industries include cotton ginning and the manufacture of transport equipment. its financial capacity considerably. It also reflects the pressure on the bank's resources that has resulted from the substantial write-offs taken over the past several years. In light of the level of problem loans facing the bank, its profitability and capital underpinning un·der·pin·ning n. 1. Material or masonry used to support a structure, such as a wall. 2. A support or foundation. Often used in the plural. 3. Informal The human legs. Often used in the plural. provide less coverage protection. Similar to other major Japanese trust banks, Mitsubishi Trust has loan concentrations in risky sectors, such as nonbank non·bank adj. Of, relating to, or done by a business or an institution that is not a bank but performs similar services. financial institutions and real estate companies, totaling approximately two-fifth of its total loans. Standard & Poor's believes that the recent sluggish domestic economy and declining asset values in Japan will adversely impact many of these sectors. Also, Mitsubishi Trust plans to record certain credit costs this fiscal year owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de its exposure to several unstable Asian countries Noun 1. Asian country - any one of the nations occupying the Asian continent Asian nation country, land, state - the territory occupied by a nation; "he returned to the land of his birth"; "he visited several European countries" . Mitsubishi Trust's 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 profitability appear somewhat less weak than other major Japanese banks. Even after including assets in principal-guaranteed trust accounts as risk assets, Mitsubishi Trust's capital ratio is higher than those of most major Japanese banks. Mitsubishi Trust also maintains large latent Hidden; concealed; that which does not appear upon the face of an item. For example, a latent defect in the title to a parcel of real property is one that is not discoverable by an inspection of the title made with ordinary care. gains in its securities portfolio, at N440 billion at the end of March 1998. This relative strength among Japanese major banks, however, could be offset by additional credit costs resulting from the recent unstable domestic and Asian economies. Another concern is that Mitsubishi Trust's large gains from interest-rate swaps over the past several years make it vulnerable to interest-rate volatility. However, the bank has been successful in managing this part of its business so far. Mitsubishi Trust is focusing on the asset-management business and it has a reputation as the top Japanese trust bank in this area. However, Mitsubishi Trust's revenues still greatly depend on traditional interest income, including those from principal-guaranteed trust products. Standard & Poor's does not expect Mitsubishi Trust to significantly increase its asset-management fee revenues in the near term because of increasing competition. Outlook: Stable. Standard & Poor's believes Mitsubishi Trust should be able to absorb persistently high credit charges over the next couple of years without significantly diminishing its credit profile any further. With its established reputation in the trust business and close relationships with the Mitsubishi group of companies, Mitsubishi Trust should continue to enjoy a solid customer base, said Standard & Poor's. -- CreditWire -0- RATINGS REVISED; OFF CREDITWATCH TO FROM Mitsubishi Trust & Banking Corp. Counterparty credit rtg BBB/Stable/A-3 A-/Watch Neg/A-2 Sr unsecd BBB A-/Watch Neg CDs BBB/A-3 A-/Watch Neg/A-2 Mitsubishi Trust Finance (Asia) Ltd. Counterparty credit rtg BBB/Stable A-/Watch Neg Sr unsecd (gtd by Mitsubishi Trust & Banking Corp.) BBB A-/Watch Neg Mitsubishi Trust Australia Ltd. Counterparty credit rtg BBB/Stable/A-3 A-/Watch Neg/A-2 CP (gtd by Mitsubishi Trust & Banking Corp.) A-3 A-2/Watch Neg CONTACT: Yoshiyuki Mitsugi, Tokyo (81) 3-3593-8721 Takamasa Yamaoka, Tokyo (81) 3-3593-8719 Roger B Taillon, 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) 212-208-1570 For more information on criteria or subscriptions: http://www.ratings.standardpoor.com |
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