Moody's rates Sumitomo Mitsui bonds Baa2

Moody's Japan K.K. said it assigned a Baa2 (hyb) rating to Sumitomo Mitsui Financial Group, Inc.'s $1.75 billion subordinated bonds due April 2, 2024 with contractual point of non-viability loss absorption features.

The Baa2 (hyb) rating assigned to the bonds is positioned two notches below the a3 adjusted baseline credit assessment of Sumitomo Mitsui Banking Corp., the main operating bank of Sumitomo Mitsui Financial.

As is common practice, Moody's anchor for rating non-viability securities is the adjusted baseline credit assessment of the main operating bank. The agency assumes that the adjusted baseline credit assessment reflects the probability that the bank would have a "viability event" that would trigger loss absorption under the issuance terms.

The rating is positioned two notches below the adjusted baseline credit assessment because loss severity is assumed to be very high at default. This is because the terms of the security require 100% write-down when a viability event occurs and also because of the structural subordination inherent in issuing at the holding company, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.