Moody's placed Mitsubishi UFJ Lease & Finance Co. Ltd.'s ratings on review for downgrade.
Moody's said Aug. 29 that the review involves the company's A3 long-term issuer rating, as well as its A3 senior unsecured debt rating and (P)A3 senior unsecured Euro medium-term note program rating. The ratings outlook was changed to ratings under review from stable, while outlook on the company's senior unsecured debt rating was withdrawn for Moody's own business reasons.
The review for downgrade came after Moody's placed MUFG Bank Ltd.'s "a3" baseline credit assessment on review for downgrade due to an inconsistency between the Mitsubishi UFJ Financial Group Inc. banking unit's core earnings profile and BCA.
Mitsubishi UFJ Lease & Finance's A3 ratings incorporate a three-notch uplift from its "baa3" standalone assessment as a result of Moody's expectation that the company's shareholder, Mitsubishi UFJ Financial, will provide high level of support in times of stress. The company's standalone assessment reflects its stable profitability, strong asset quality, strong affiliation with shareholders Mitsubishi UFJ Financial and Mitsubishi Corp. and weak liquidity, among other factors.
The rating agency noted that Mitsubishi UFJ Lease & Finance's ratings could be downgraded if there is a downgrade of MUFG Bank's BCA or a significant decline in Mitsubishi UFJ Financial Group's ownership in the company, among other reasons.
