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S&P: Promise on positive watch
Standard & Poor's said it placed on CreditWatch with positive implications Promise Co. Ltd.'s BB long-term counterparty rating and BB long-term issue ratings.
The agency also said it affirmed its B short-term rating.
The CreditWatch placement follows news that Sumitomo Mitsui Financial Group Inc. intends increase its stake in Promise to 100% from the current 22% through an open offer bid, S&P said.
The company also plans to inject capital amounting to ¥120 billion, which is more than 70% of Promise's net assets as of June 2011, the agency said.
The ratings incorporate a two-notch uplift based on possible extraordinary support from Sumitomo, S&P added.
That support is likely to underpin Promise's funding and capitalization, which is weakening due to an expected net loss of ¥195 billion due to large provisioning for interest refunds, the agency said.
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