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Moody's assigns A1 to Norinchukin Bank's Series 766 debenture.

Summary: JPY48 billion in new debt securities rated

Moody's Japan K.K. has assigned an A1 rating to the Norinchukin Bank's Series 766 debenture. The rating outlook is stable.

The specific bond issue rated is:

aACAo JPY48 billion Series 766 senior unsecured debenture, due 2019

RATINGS RATIONALE

The A1 ratings incorporate a three-notch uplift from the bank's baseline credit assessment (BCA) of b1, due to our assessment of the "very high"

probability of systemic support, given the bank's importance as the central financial organization for Japan's agricultural, forestry, and fishery cooperatives (JAs) and the prefectural banking federations of agricultural cooperatives (shinnoren).

Norinchukin's C- bank financial strength rating (BFSR) -- equivalent to a BCA of b1 -- reflects our overall assessment of the bank's (1) strong franchise as the central financial organization for Japan's agricultural, forestry, and fishery cooperatives, (2) strong liquidity firmly backed by solid and sticky deposits from its member JAs and shinnoren, (3) high risk positioning due to sizeable foreign securities investments and the diversity of its market investment portfolio, and (4) significant sensitivity to market movements of its capital structure.

Factors that could move the rating upwards include, but are not limited to, the following: explicit management commitment to control and keep its capital volatility within a minimal range for a sustained period.

Factors that could move the rating downwards include, but are not limited to, the following: (1) deviation of its earnings from its target set in the "Medium-Term Management Plan"; (2) the bank fails to maintain stable Tier 1 capital amounts and/or ratios as a result of the deterioration of its investment securities portfolio; (3) failure of the JAs and shinnoren, resulting in depositor losses or substantial financial assistance from Norinchukin; or (4) signs of Norinchukin's reduced importance as a central institution for Japan's agricultural, forestry, and fishery cooperatives.

The Norinchukin Bank, headquartered in Tokyo, is the central financial organization for Japan's agricultural, forestry, and fishery cooperatives.

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Publication:EMBIN (Emerging Markets Business Information News)
Geographic Code:9JAPA
Date:Mar 19, 2014
Words:336
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