S&P shifts Orix outlook to stable

S&P said it revised its outlook on Orix Corp. to stable from negative and affirmed the long-term issuer credit ratings on the company at A-. The agency also affirmed all issue credit ratings.

“The outlook revision is based on our view that Orix will maintain capitalization relative to risk assets at above 10% of its risk-adjusted capital (RAC) ratio, the threshold for our strong capital assessment. We forecast that Orix's RAC ratio will hover between 10% and 10.5% in the next one to two years,” S&P said in a press release.

The agency noted Orix’s RAC ratio had dropped by 1 percentage point to 10.2% as of March 2021, from 11.2% a year earlier.

“The ratio may further dip to around the threshold of 10% temporarily, due to the investments in the renewable energy business,” S&P warned.

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