S&P puts ORIX on watch

S&P Global Ratings said it placed ORIX Corp.’s A- long-term issuer credit and senior unsecured ratings and BBB subordinated loan rating on CreditWatch with negative implications.

The placement follows ORIX reporting it plans to contribute ¥200 billion for the acquisition of Toshiba, the agency said.

“The CreditWatch placement reflects our view that Orix's risk adjusted capital (RAC) ratio will likely fall and stay below 10% if it contributes funds to acquire shares in Toshiba Corp. Orix intends to do so through a special purpose entity to be established by Japan Industrial Partners Inc. (JIP) for the acquisition. An RAC ratio of 10% is at the lower end of the range commensurate for our assessment of its capital as strong,” S&P said in a press release.

The agency said it would resolve the negative watch after it confirms the result of a tender offer for Toshiba from JIP.

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