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-Moody's assigns A1 rating to Norinchukin Bank.

BANKING AND CREDIT NEWS-September 16, 2011--Moody's assigns A1 rating to Norinchukin Bank(C)2011 M2 COMMUNICATIONS

16 September 2011 -- Moody's has set an A1 rating, with a "stable" outlook, to the JPY69bn (USD899.3m/EUR652.3m) series 736 senior unsecured debenture of Japan's Norinchukin Bank.

The instrument matures in 2016.

"Moody's A1 ratings on Norinchukin are based on a Baseline Credit Assessment (BCA) of Baa1, the systemic support input for Japan bank ratings of Aa2, and Moody's assessment (based on the bank's importance as the primary banking institution for Japan's agricultural, forestry, and fishery cooperatives) that the likelihood of systemic support for Norinchukin is very high," the agency said.

Norinchukin bears a bank financial strength rating (BFSR) of C-, which takes into account its sound franchise as the central financial organisation for the country's agricultural, forestry and fishery co-operatives, its high risk positioning owing to large foreign securities investments and the complexity of its market investment portfolio as well as the volatility in financial fundamentals, although this is moderated by sound liquidity derived from the savings of the agricultural cooperatives (JAs) and the prefectural banking federations of the agricultural cooperatives (the shinnoren), Moody's added.

The agency also underscored the bank's stand-alone boosted capital, which is unique to its position as an international investment institution, and the difficulties it faces in relation to its business model. These factors are also incorporated in the BFSR, Moody's concluded.

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Publication:M2 Banking & Credit News (BCN)
Geographic Code:9JAPA
Date:Sep 16, 2011
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