S&P: Hitachi Capital bonds BBB

S&P said it assigned a BBB long-term issue rating to Hitachi Capital Corp.’s unsecured subordinated hybrid bonds.

The agency said it arrived at the BBB issue rating on the bonds by notching down from the company's A- stand-alone credit profile by two notches.

The two-notch differential reflects one notch for the subordination of the bonds in legal bankruptcy proceedings and an additional notch for the issuer's option to defer interest payments, S&P said.

Given that the bonds also have sufficient permanence, the agency said it thinks they meet the standards for intermediate equity content of hybrid capital instruments.

S&P said it classifies the bonds as having intermediate equity content until their respective first call dates in 2021 for series 1 and in 2026 for series 2.

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