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-Moody's reviews for downgrade Japanese regional, local govts on sovereign action.

BANKING AND CREDIT NEWS-May 31, 2011--Moody's reviews for downgrade Japanese regional, local govts on sovereign action(C)2011 M2 COMMUNICATIONS

31 May 2011 -- Moody's has initiated a downgrade review on 12 Japanese regional and local governments (RLGs).

The move follows the downgrade review placement of the sovereign's Aa2 local- and foreign-currency bond ratings, the agency said.

The affected governments are Fukuoka City, Fukuoka Prefecture, Hamamatsu City, Hiroshima Prefecture, City of Kyoto, City of Nagoya, Niigata Prefecture, Osaka City Government, Sakai City, City of Sapporo, Shizuoka City and Shizuoka Prefecture.

The agency views the RLGs as closely linked to the central government. According to Moody's, Japan's government is highly likely to provide liquidity backing to these sub-national governments, should the need arise. Therefore, the outcome of the review on the RLGs will largely depend on the outcome of the sovereign's review, the agency said.

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Publication:M2 Banking & Credit News (BCN)
Geographic Code:9JAPA
Date:May 31, 2011
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