Key Takeaways
- There were no defaults recorded among Japanese corporate and public finance issuer credit ratings in 2023--the eighth year in a without a default.
- Of the entities covered by this study, 22 have defaulted since Jan. 1, 1981, and among those with active ratings one year prior to default, all were rated speculative grade, except for two in 2009.
- Entities rated investment grade were far more likely to maintain the same ratings over comparable time periods than were speculative-grade entities.
- The Gini ratio, an indicator of rank-ordering accuracy, shows that ratings on Japanese entities continue to serve as an effective measures of relative default risk.
Our study found a strong negative correlation between Japanese issuer credit rating levels and the frequency of defaults over the 43 years through 2023. Moreover, higher ratings have generally been more stable than lower ratings.
In 2023, there were no defaults among Japanese issuers rated by S&P Global Ratings--the eighth year in a row with no defaults--and the percentage of issuers with unchanged ratings decreased.
This study involves 503 Japanese entities that have, or previously had, S&P Global Ratings long-term issuer credit ratings. The entities are industrial corporates (317), financial institutions (119), insurers (50), and public finance entities (17). "Financials" refers to the financial institutions and insurance sectors combined. This study covers both public and confidential ratings from 1981 to 2023.
Correlation Between Ratings And Default Rates
Despite the small number of rated entities, the metrics in the study show a negative correlation between rating levels and the occurrence of default. In other words, the higher the credit rating, the lower the historical default rate, and vice versa (see tables 1-4).
Table 1
| Average cumulative default rates: Japanese industrials and financials, 1981-2023 (%) | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Rating | M12 | M24 | M36 | M48 | M60 | M72 | M84 | M96 | M108 | M120 | ||||||||||||
| AAA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| AA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.04 | 0.15 | 0.27 | ||||||||||||
| A | 0.00 | 0.00 | 0.00 | 0.03 | 0.11 | 0.20 | 0.36 | 0.50 | 0.62 | 0.74 | ||||||||||||
| BBB | 0.12 | 0.39 | 0.81 | 1.24 | 1.47 | 1.68 | 1.79 | 1.88 | 1.88 | 1.88 | ||||||||||||
| BB | 0.46 | 0.99 | 1.54 | 2.54 | 3.60 | 4.44 | 5.02 | 5.20 | 5.20 | 5.20 | ||||||||||||
| B | 5.23 | 8.69 | 11.24 | 14.03 | 15.12 | 15.59 | 17.01 | 17.97 | 18.95 | 19.95 | ||||||||||||
| CCC/C | 18.71 | 24.68 | 27.84 | 27.84 | 27.84 | 27.84 | 27.84 | 27.84 | 27.84 | 27.84 | ||||||||||||
| Investment grade | 0.03 | 0.09 | 0.18 | 0.29 | 0.38 | 0.48 | 0.57 | 0.67 | 0.76 | 0.84 | ||||||||||||
| Speculative grade | 2.21 | 3.59 | 4.67 | 6.03 | 7.06 | 7.78 | 8.54 | 8.88 | 9.10 | 9.33 | ||||||||||||
| All rated | 0.23 | 0.42 | 0.60 | 0.84 | 1.02 | 1.18 | 1.35 | 1.48 | 1.57 | 1.67 | ||||||||||||
| M--Month. Note: One-month marginal default rates are used to calculate cumulative default rates. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||||
Table 2
| Average cumulative default rates: Japanese public finance, 1981-2023 (%) | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Rating | M12 | M24 | M36 | M48 | M60 | M72 | M84 | M96 | M108 | M120 | ||||||||||||
| AAA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| AA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| A | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| BBB | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| BB | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| B | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| CCC/C | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| Investment grade | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| Speculative grade | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| All rated | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| M--Month. Note: One-month marginal default rates are used to calculate cumulative default rates. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||||
Table 3
| Average cumulative default rates: Japanese industrials, 1981-2023 (%) | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Rating | M12 | M24 | M36 | M48 | M60 | M72 | M84 | M96 | M108 | M120 | ||||||||||||
| AAA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| AA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| A | 0.00 | 0.00 | 0.00 | 0.07 | 0.17 | 0.28 | 0.39 | 0.51 | 0.63 | 0.76 | ||||||||||||
| BBB | 0.00 | 0.00 | 0.03 | 0.08 | 0.08 | 0.08 | 0.08 | 0.08 | 0.08 | 0.08 | ||||||||||||
| BB | 0.00 | 0.00 | 0.19 | 0.85 | 1.56 | 2.22 | 2.57 | 2.63 | 2.63 | 2.63 | ||||||||||||
| B | 2.58 | 4.64 | 6.45 | 7.50 | 7.58 | 7.58 | 8.55 | 9.63 | 10.73 | 11.84 | ||||||||||||
| CCC/C | 15.66 | 22.78 | 27.25 | 27.25 | 27.25 | 27.25 | 27.25 | 27.25 | 27.25 | 27.25 | ||||||||||||
| Investment grade | 0.00 | 0.00 | 0.01 | 0.05 | 0.10 | 0.14 | 0.19 | 0.24 | 0.29 | 0.35 | ||||||||||||
| Speculative grade | 1.12 | 1.83 | 2.52 | 3.25 | 3.79 | 4.27 | 4.76 | 5.07 | 5.33 | 5.60 | ||||||||||||
| All rated | 0.17 | 0.27 | 0.39 | 0.54 | 0.66 | 0.77 | 0.89 | 0.98 | 1.07 | 1.16 | ||||||||||||
| M--Month. Note: One-month marginal default rates are used to calculate cumulative default rates. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||||
Table 4
| Average cumulative default rates: Japanese financials, 1981-2023 (%) | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Rating | M12 | M24 | M36 | M48 | M60 | M72 | M84 | M96 | M108 | M120 | ||||||||||||
| AAA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
| AA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.09 | 0.36 | 0.63 | ||||||||||||
| A | 0.00 | 0.00 | 0.00 | 0.00 | 0.06 | 0.15 | 0.33 | 0.50 | 0.60 | 0.72 | ||||||||||||
| BBB | 0.31 | 1.01 | 2.03 | 3.05 | 3.64 | 4.18 | 4.44 | 4.67 | 4.67 | 4.67 | ||||||||||||
| BB | 3.03 | 6.48 | 8.93 | 11.67 | 14.55 | 16.28 | 18.01 | 18.73 | 18.73 | 18.73 | ||||||||||||
| B | 27.74 | 43.07 | 51.82 | 69.34 | 78.83 | 83.21 | 88.32 | 88.32 | 88.32 | 88.32 | ||||||||||||
| CCC/C | 27.27 | 30.30 | 30.30 | 30.30 | 30.30 | 30.30 | 30.30 | 30.30 | 30.30 | 30.30 | ||||||||||||
| Investment grade | 0.05 | 0.17 | 0.35 | 0.53 | 0.67 | 0.82 | 0.97 | 1.13 | 1.24 | 1.36 | ||||||||||||
| Speculative grade | 8.58 | 13.82 | 17.06 | 21.85 | 25.53 | 27.54 | 29.65 | 30.21 | 30.21 | 30.21 | ||||||||||||
| All rated | 0.31 | 0.59 | 0.86 | 1.19 | 1.45 | 1.67 | 1.90 | 2.06 | 2.17 | 2.29 | ||||||||||||
| M--Month. Note: One-month marginal default rates are used to calculate cumulative default rates. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||||
Table 5
| Japan Gini ratios | ||||||||
|---|---|---|---|---|---|---|---|---|
| % | 12-month | 36-month | 60-month | |||||
| All corporates | 94.40 | 87.95 | 81.73 | |||||
| Industrials | 97.08 | 94.43 | 81.79 | |||||
| Financials | 97.41 | 92.88 | 90.22 | |||||
| Note: Static pools are monthly. Source: S&P Global Ratings Credit Research & Insights. | ||||||||
Some rating categories have smaller sample sizes than others, which can result in defaults and transition rates that seem counterintuitive. But these rates do not imply that 'AAA' rated companies are riskier than 'A' rated companies, for example, but rather that both are highly unlikely to default (see "S&P Global Ratings Definitions"). (In tables 6-9, the 'AA' rating category combines the three rating levels within this category: 'AA+', 'AA', and 'AA-'. This is also the case for rating categories 'A', 'BBB', and 'BB', and 'B', while 'AAA' represents only one rating level. The 'CCC+', 'CCC', 'CCC-', 'CC', and 'C' ratings are combined into the 'CCC'/'C' segment.)
Table 6
| Average 12-month rating transition matrix: Japanese industrials and financials, 1981-2023 (%) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| From/To | AAA | AA | A | BBB | BB | B | CCC/C | D | NR | |||||||||||
| AAA | 85.87 | 12.62 | 0.28 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1.24 | |||||||||||
| AA | 0.30 | 88.33 | 7.97 | 0.01 | 0.00 | 0.08 | 0.00 | 0.00 | 3.31 | |||||||||||
| A | 0.00 | 0.79 | 92.10 | 2.44 | 0.05 | 0.01 | 0.00 | 0.00 | 4.61 | |||||||||||
| BBB | 0.00 | 0.00 | 7.06 | 79.20 | 2.19 | 0.17 | 0.02 | 0.12 | 11.23 | |||||||||||
| BB | 0.00 | 0.00 | 0.00 | 8.70 | 73.29 | 2.33 | 0.26 | 0.46 | 14.95 | |||||||||||
| B | 0.00 | 0.00 | 0.00 | 0.00 | 13.32 | 63.74 | 3.62 | 5.23 | 14.09 | |||||||||||
| CCC/C | 0.00 | 0.00 | 0.00 | 0.00 | 6.15 | 17.21 | 31.97 | 19.26 | 25.41 | |||||||||||
| D--Default. NR--Not rated. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||
Table 7
| Average 12-month rating transition matrix: Japanese public finance, 1981-2023 (%) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| From/To | AAA | AA | A | BBB | BB | B | CCC/C | D | NR | |||||||||||
| AAA | 84.47 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 15.53 | |||||||||||
| AA | 0.00 | 83.89 | 11.41 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 4.70 | |||||||||||
| A | 0.00 | 0.00 | 94.16 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 5.84 | |||||||||||
| BBB | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| BB | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| B | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| CCC/C | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| D--Default. NR--Not rated. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||
Table 8
| Average 36-month rating transition matrix: Japanese industrials and financials, 1981-2023 (%) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| From/To | AAA | AA | A | BBB | BB | B | CCC/C | D | NR | |||||||||||
| AAA | 62.18 | 32.72 | 3.07 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 2.02 | |||||||||||
| AA | 0.58 | 68.35 | 20.81 | 0.32 | 0.00 | 0.29 | 0.00 | 0.00 | 9.66 | |||||||||||
| A | 0.00 | 1.94 | 77.07 | 6.35 | 0.13 | 0.10 | 0.01 | 0.00 | 14.40 | |||||||||||
| BBB | 0.00 | 0.00 | 17.05 | 45.36 | 3.67 | 0.47 | 0.17 | 0.83 | 32.45 | |||||||||||
| BB | 0.00 | 0.00 | 0.53 | 16.30 | 35.61 | 2.43 | 1.22 | 1.58 | 42.33 | |||||||||||
| B | 0.00 | 0.00 | 0.00 | 3.63 | 21.25 | 26.66 | 1.70 | 11.28 | 35.47 | |||||||||||
| CCC/C | 0.00 | 0.00 | 0.00 | 0.00 | 23.56 | 8.89 | 0.00 | 30.22 | 37.33 | |||||||||||
| D--Default. NR--Not rated. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||
Table 9
| Average 36-Month Rating Transition Matrix, Japanese Public Finance (1981-2023) (%) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| From/To | AAA | AA | A | BBB | BB | B | CCC/C | D | NR | |||||||||||
| AAA | 61.17 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 38.83 | |||||||||||
| AA | 0.00 | 54.75 | 29.82 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 15.44 | |||||||||||
| A | 0.00 | 0.00 | 81.05 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 18.95 | |||||||||||
| BBB | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| BB | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| B | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| CCC/C | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| D--Default. NR--Not rated. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||
Table 10
| 2023 Japanese industrials and financials rating transitions | ||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| From/To | Issuer count | AAA | AA+ | AA | AA- | A+ | A | A- | BBB+ | BBB | BBB- | BB+ | BB | BB- | B+ | B | B- | CCC/C | D | NR | ||||||||||||||||||||||
| AAA | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| AA+ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| AA | 1 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| AA- | 5 | 0 | 0 | 0 | 5 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| A+ | 40 | 0 | 0 | 0 | 0 | 38 | 2 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| A | 44 | 0 | 0 | 0 | 0 | 2 | 39 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | ||||||||||||||||||||||
| A- | 26 | 0 | 0 | 0 | 0 | 0 | 3 | 22 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | ||||||||||||||||||||||
| BBB+ | 13 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 8 | 3 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | ||||||||||||||||||||||
| BBB | 11 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3 | 6 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | ||||||||||||||||||||||
| BBB- | 3 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| BB+ | 4 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | 1 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| BB | 3 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | ||||||||||||||||||||||
| BB- | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| B+ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| B- | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| CCC/C | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||
| Total | 152 | 0 | 0 | 1 | 5 | 40 | 44 | 24 | 11 | 11 | 0 | 4 | 2 | 0 | 2 | 0 | 0 | 1 | 0 | 7 | ||||||||||||||||||||||
| D--Default. NR--Not rated. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||||||||||||||||||||||||
Table 11
| 2023 Japanese public finance rating transitions | ||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| From/To | Total | AAA | AA+ | AA | AA- | A+ | A | A- | BBB+ | BBB | BBB- | BB+ | BB | BB- | B+ | B | B- | CCC/C | D | NR | ||||||||||||||||||||||
| AAA | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| AA+ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| AA | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| AA- | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| A+ | 8 | 0 | 0 | 0 | 0 | 8 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| A | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| A- | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| BBB+ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| BBB | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| BBB- | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| BB+ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| BB | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| BB- | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| B+ | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| B- | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| CCC/C | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| Total | 8 | 0 | 0 | 0 | 0 | 8 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
| D--Default. NR--Not rated. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||||||||||||||||||||||||
By broad rating category, there were 0.7% upgrades (as a proportion of total rated issuers) for industrial and financial issuers in 2023, up from zero in 2022. The proportion of issuers downgraded rose to 2% in 2023 from 0.7% in 2022 (see table 12). The percentage of unchanged ratings in 2023 fell to 92.8% from 98% in 2022.
We also looked at rating transitions including the rating modifier--the plus (+) or minus (-) following the rating. When including rating modifiers, upgrades rose to 7.9% in 2023 from 2.6% in 2022, and downgrades rose to 6.6% from 2%. The percentage of issuers with stable ratings fell to 81% in 2023 from 94% in 2022.
Table 12
| Summary of annual Japanese industrials and financials rating changes* | ||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --Category based-- | --With modifiers-- | |||||||||||||||||||||||||||
| % | Issuers as of Jan. 1 | Upgrades | Downgrades§ | Unchanged rtgs | Downgrade/ upgrade ratio | Defaults | Withdrawn rtgs | Upgrades | Downgrades§ | Unchanged ratings | Downgrade/ upgrade ratio | Defaults | Withdrawn rtgs | |||||||||||||||
| 1981 | 5 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 20.00 | 0.00 | 80.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1982 | 6 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1983 | 8 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 12.50 | 0.00 | 87.50 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1984 | 12 | 16.67 | 8.33 | 75.00 | 0.50 | 0.00 | 0.00 | 16.67 | 8.33 | 75.00 | 0.50 | 0.00 | 0.00 | |||||||||||||||
| 1985 | 15 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1986 | 18 | 5.56 | 0.00 | 94.44 | 0.00 | 0.00 | 0.00 | 5.56 | 0.00 | 94.44 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1987 | 19 | 0.00 | 10.53 | 89.47 | 0.00 | 0.00 | 0.00 | 0.00 | 10.53 | 89.47 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1988 | 28 | 0.00 | 3.57 | 92.86 | 0.00 | 0.00 | 3.57 | 0.00 | 3.57 | 92.86 | 0.00 | 0.00 | 3.57 | |||||||||||||||
| 1989 | 35 | 2.86 | 2.86 | 94.29 | 1.00 | 0.00 | 0.00 | 5.71 | 5.71 | 88.57 | 1.00 | 0.00 | 0.00 | |||||||||||||||
| 1990 | 41 | 4.88 | 0.00 | 95.12 | 0.00 | 0.00 | 0.00 | 4.88 | 0.00 | 95.12 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1991 | 44 | 0.00 | 18.18 | 81.82 | 0.00 | 0.00 | 0.00 | 0.00 | 25.00 | 75.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1992 | 49 | 0.00 | 12.24 | 85.71 | 0.00 | 0.00 | 2.04 | 0.00 | 28.57 | 69.39 | 0.00 | 0.00 | 2.04 | |||||||||||||||
| 1993 | 52 | 0.00 | 7.69 | 90.38 | 0.00 | 0.00 | 1.92 | 0.00 | 26.92 | 71.15 | 0.00 | 0.00 | 1.92 | |||||||||||||||
| 1994 | 54 | 0.00 | 20.37 | 79.63 | 0.00 | 0.00 | 0.00 | 0.00 | 27.78 | 72.22 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1995 | 60 | 0.00 | 6.67 | 93.33 | 0.00 | 0.00 | 0.00 | 0.00 | 21.67 | 78.33 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1996 | 63 | 0.00 | 3.17 | 95.24 | 0.00 | 0.00 | 1.59 | 1.59 | 7.94 | 88.89 | 5.00 | 0.00 | 1.59 | |||||||||||||||
| 1997 | 70 | 1.43 | 5.71 | 90.00 | 4.00 | 0.00 | 2.86 | 1.43 | 12.86 | 82.86 | 9.00 | 0.00 | 2.86 | |||||||||||||||
| 1998 | 83 | 0.00 | 27.71 | 67.47 | 0.00 | 1.20 | 3.61 | 2.41 | 53.01 | 39.76 | 22.00 | 1.20 | 3.61 | |||||||||||||||
| 1999 | 99 | 0.00 | 12.12 | 85.86 | 0.00 | 0.00 | 2.02 | 0.00 | 27.27 | 70.71 | 0.00 | 0.00 | 2.02 | |||||||||||||||
| 2000 | 124 | 0.00 | 1.61 | 91.94 | 0.00 | 0.81 | 5.65 | 7.26 | 3.23 | 83.06 | 0.44 | 0.81 | 5.65 | |||||||||||||||
| 2001 | 171 | 0.00 | 6.43 | 90.06 | 0.00 | 0.00 | 3.51 | 2.34 | 15.79 | 78.36 | 6.75 | 0.00 | 3.51 | |||||||||||||||
| 2002 | 192 | 1.04 | 4.69 | 89.06 | 4.50 | 0.00 | 5.21 | 2.08 | 17.71 | 75.00 | 8.50 | 0.00 | 5.21 | |||||||||||||||
| 2003 | 207 | 0.48 | 1.93 | 94.20 | 4.00 | 0.48 | 2.90 | 3.38 | 2.90 | 90.34 | 0.86 | 0.48 | 2.90 | |||||||||||||||
| 2004 | 301 | 8.97 | 0.66 | 87.04 | 0.07 | 0.66 | 2.66 | 21.59 | 2.33 | 72.76 | 0.11 | 0.66 | 2.66 | |||||||||||||||
| 2005 | 351 | 11.97 | 1.14 | 80.34 | 0.10 | 0.28 | 6.27 | 26.50 | 1.71 | 65.24 | 0.06 | 0.28 | 6.27 | |||||||||||||||
| 2006 | 342 | 4.09 | 0.88 | 92.11 | 0.21 | 0.00 | 2.92 | 12.57 | 2.05 | 82.46 | 0.16 | 0.00 | 2.92 | |||||||||||||||
| 2007 | 351 | 4.84 | 0.85 | 60.97 | 0.18 | 0.00 | 33.33 | 26.21 | 1.99 | 38.46 | 0.08 | 0.00 | 33.33 | |||||||||||||||
| 2008 | 242 | 2.07 | 2.07 | 90.50 | 1.00 | 0.00 | 5.37 | 7.44 | 4.13 | 83.06 | 0.56 | 0.00 | 5.37 | |||||||||||||||
| 2009 | 236 | 0.42 | 3.81 | 65.25 | 9.00 | 2.12 | 28.39 | 0.85 | 11.86 | 56.78 | 14.00 | 2.12 | 28.39 | |||||||||||||||
| 2010 | 168 | 2.98 | 0.60 | 88.69 | 0.20 | 0.60 | 7.14 | 6.55 | 4.76 | 80.95 | 0.73 | 0.60 | 7.14 | |||||||||||||||
| 2011 | 160 | 2.50 | 6.88 | 88.13 | 2.75 | 0.00 | 2.50 | 7.50 | 16.25 | 73.75 | 2.17 | 0.00 | 2.50 | |||||||||||||||
| 2012 | 161 | 0.00 | 7.45 | 88.82 | 0.00 | 0.00 | 3.73 | 0.62 | 13.66 | 81.99 | 22.00 | 0.00 | 3.73 | |||||||||||||||
| 2013 | 162 | 3.09 | 2.47 | 92.59 | 0.80 | 0.00 | 1.85 | 4.32 | 4.94 | 88.89 | 1.14 | 0.00 | 1.85 | |||||||||||||||
| 2014 | 163 | 3.07 | 1.84 | 91.41 | 0.60 | 0.00 | 3.68 | 7.36 | 2.45 | 86.50 | 0.33 | 0.00 | 3.68 | |||||||||||||||
| 2015 | 165 | 2.42 | 8.48 | 83.03 | 3.50 | 0.61 | 5.45 | 6.06 | 24.24 | 63.64 | 4.00 | 0.61 | 5.45 | |||||||||||||||
| 2016 | 163 | 1.84 | 0.61 | 94.48 | 0.33 | 0.00 | 3.07 | 9.20 | 4.91 | 82.82 | 0.53 | 0.00 | 3.07 | |||||||||||||||
| 2017 | 162 | 0.62 | 0.62 | 96.91 | 1.00 | 0.00 | 1.85 | 4.32 | 7.41 | 86.42 | 1.71 | 0.00 | 1.85 | |||||||||||||||
| 2018 | 160 | 1.88 | 1.25 | 93.13 | 0.67 | 0.00 | 3.75 | 6.25 | 3.75 | 86.25 | 0.60 | 0.00 | 3.75 | |||||||||||||||
| 2019 | 159 | 1.26 | 3.14 | 91.19 | 2.50 | 0.00 | 4.40 | 4.40 | 8.18 | 83.02 | 1.86 | 0.00 | 4.40 | |||||||||||||||
| 2020 | 154 | 0.00 | 7.79 | 90.26 | 0.00 | 0.00 | 1.95 | 0.00 | 15.58 | 82.47 | 0.00 | 0.00 | 1.95 | |||||||||||||||
| 2021 | 154 | 0.65 | 3.90 | 92.21 | 6.00 | 0.00 | 3.25 | 2.60 | 4.55 | 89.61 | 1.75 | 0.00 | 3.25 | |||||||||||||||
| 2022 | 152 | 0.00 | 0.66 | 98.03 | 0.00 | 0.00 | 1.32 | 2.63 | 1.97 | 94.08 | 0.75 | 0.00 | 1.32 | |||||||||||||||
| 2023 | 152 | 0.66 | 1.97 | 92.76 | 3.00 | 0.00 | 4.61 | 7.89 | 6.58 | 80.92 | 0.83 | 0.00 | 4.61 | |||||||||||||||
| *This table compares the net change in ratings from the first to the last day of each year. All intermediate ratings are disregarded. §Excludes downgrades to 'D', shown separately in the default column. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||||||||||
Table 13
| Summary of annual Japanese public finance rating changes* | ||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --Category based-- | --With modifiers-- | |||||||||||||||||||||||||||
| % | Issuers as of Jan. 1 | Upgrades | Downgrades | Unchanged rtgs | Downgrade/ upgrade ratio | Defaults | Withdrawn rtgs | Upgrades | Downgrades | Unchanged rtgs | Downgrade/ upgrade ratio | Defaults | Withdrawn rtgs | |||||||||||||||
| 1981 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1982 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1983 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1984 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1985 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1986 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1987 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1988 | 1 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1989 | 1 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1990 | 1 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1991 | 1 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1992 | 1 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1993 | 1 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1994 | 1 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1995 | 1 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | |||||||||||||||
| 1996 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1997 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1998 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 1999 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2000 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2001 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2002 | 1 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2003 | 1 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2004 | 1 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2005 | 1 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | |||||||||||||||
| 2006 | 1 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2007 | 3 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 66.67 | 0.00 | 33.33 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2008 | 6 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2009 | 13 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2010 | 13 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2011 | 15 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 53.33 | 46.67 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2012 | 15 | 0.00 | 0.00 | 93.33 | 0.00 | 0.00 | 6.67 | 0.00 | 0.00 | 93.33 | 0.00 | 0.00 | 6.67 | |||||||||||||||
| 2013 | 15 | 0.00 | 0.00 | 93.33 | 0.00 | 0.00 | 6.67 | 0.00 | 0.00 | 93.33 | 0.00 | 0.00 | 6.67 | |||||||||||||||
| 2014 | 14 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2015 | 14 | 0.00 | 71.43 | 0.00 | 0.00 | 0.00 | 28.57 | 0.00 | 71.43 | 0.00 | 0.00 | 0.00 | 28.57 | |||||||||||||||
| 2016 | 10 | 0.00 | 0.00 | 80.00 | 0.00 | 0.00 | 20.00 | 0.00 | 0.00 | 80.00 | 0.00 | 0.00 | 20.00 | |||||||||||||||
| 2017 | 8 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2018 | 8 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2019 | 8 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2020 | 8 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2021 | 8 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2022 | 8 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| 2023 | 8 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 100.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| *This table compares the net change in ratings from the first to the last day of each year. All intermediate ratings are disregarded. §Excludes downgrades to 'D', shown separately in the default column. Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||||||||||
Table 14
| Publicly rated Japanese defaulters | ||||||
|---|---|---|---|---|---|---|
| Company | Year of default | Type of default | ||||
| Sharp Corp. | 2015 | Debt-for-equity swap | ||||
| Elpida Memory Inc. | 2012 | Corporate reorganization | ||||
| Takefuji Corp. | 2010 | Corporate reorganization | ||||
| Takefuji Corp. | 2009 | Distressed exchange | ||||
| Japan Airlines Corp. | 2009 | Default under ADR | ||||
| NIS Group Co. Ltd. | 2009 | Distressed exchange | ||||
| CSK Holding Corp. | 2009 | Debt-for-equity swaps | ||||
| Aiful Corp. | 2009 | Default under ADR | ||||
| Mitsubishi Motors Corp. | 2005 | Debt-for-equity swaps | ||||
| Sojitz Corp. | 2004 | Debt-for-equity swaps | ||||
| Mitsubishi Motors Corp. | 2004 | Debt-for-equity swaps | ||||
| Hazama Corp. | 2004 | Debt-for-equity swaps | ||||
| Kyoei Life Insurance Co.* | 2000 | Corporate reorganization | ||||
| Yamaichi Securities Co. Ltd. | 1999 | Liquidation | ||||
| Note: Defaulters with confidential ratings are excluded. *Kyoei Life Insurance was acquired by Prudential group after its failure and renamed The Gibraltar Life Insurance Co. (see https://www.prudential.com/links/about/worldwide-locations/japan). ADR--Alternative dispute resolution. Source: S&P Global Ratings Credit Research & Insights. | ||||||
Table 15
| Japanese industrials and financials ratings distribution | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
| No. of companies | ||||||||||||||||||||||||||||||
| AAA | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
| AA | 6 | 6 | 6 | 8 | 16 | 16 | 16 | 16 | 16 | 28 | 28 | 27 | 34 | 41 | ||||||||||||||||
| A | 110 | 110 | 112 | 114 | 112 | 121 | 126 | 127 | 123 | 108 | 106 | 107 | 99 | 95 | ||||||||||||||||
| BBB | 22 | 27 | 25 | 25 | 19 | 16 | 12 | 13 | 17 | 20 | 17 | 18 | 18 | 18 | ||||||||||||||||
| BB | 6 | 8 | 8 | 6 | 7 | 6 | 4 | 4 | 6 | 6 | 8 | 7 | 8 | 4 | ||||||||||||||||
| B | 2 | 0 | 0 | 1 | 0 | 0 | 1 | 2 | 0 | 3 | 4 | 3 | 2 | 2 | ||||||||||||||||
| CCC/C | 1 | 1 | 1 | 0 | 0 | 0 | 1 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
| Investment grade | 138 | 143 | 143 | 147 | 147 | 153 | 154 | 156 | 156 | 156 | 151 | 152 | 151 | 154 | ||||||||||||||||
| Speculative grade | 9 | 9 | 9 | 7 | 7 | 6 | 6 | 6 | 7 | 9 | 12 | 10 | 10 | 6 | ||||||||||||||||
| Totals | 147 | 152 | 152 | 154 | 154 | 159 | 160 | 162 | 163 | 165 | 163 | 162 | 161 | 160 | ||||||||||||||||
| % | ||||||||||||||||||||||||||||||
| AAA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
| AA | 4.08 | 3.95 | 3.95 | 5.19 | 10.39 | 10.06 | 10.00 | 9.88 | 9.82 | 16.97 | 17.18 | 16.67 | 21.12 | 25.63 | ||||||||||||||||
| A | 74.83 | 72.37 | 73.68 | 74.03 | 72.73 | 76.10 | 78.75 | 78.40 | 75.46 | 65.45 | 65.03 | 66.05 | 61.49 | 59.38 | ||||||||||||||||
| BBB | 14.97 | 17.76 | 16.45 | 16.23 | 12.34 | 10.06 | 7.50 | 8.02 | 10.43 | 12.12 | 10.43 | 11.11 | 11.18 | 11.25 | ||||||||||||||||
| BB | 4.08 | 5.26 | 5.26 | 3.90 | 4.55 | 3.77 | 2.50 | 2.47 | 3.68 | 3.64 | 4.91 | 4.32 | 4.97 | 2.50 | ||||||||||||||||
| B | 1.36 | 0.00 | 0.00 | 0.65 | 0.00 | 0.00 | 0.63 | 1.23 | 0.00 | 1.82 | 2.45 | 1.85 | 1.24 | 1.25 | ||||||||||||||||
| CCC/C | 0.68 | 0.66 | 0.66 | 0.00 | 0.00 | 0.00 | 0.63 | 0.00 | 0.61 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
| Investment grade | 93.88 | 94.08 | 94.08 | 95.45 | 95.45 | 96.23 | 96.25 | 96.30 | 95.71 | 94.55 | 92.64 | 93.83 | 93.79 | 96.25 | ||||||||||||||||
| Speculative grade | 6.12 | 5.92 | 5.92 | 4.55 | 4.55 | 3.77 | 3.75 | 3.70 | 4.29 | 5.45 | 7.36 | 6.17 | 6.21 | 3.75 | ||||||||||||||||
| Totals | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | ||||||||||||||||
| Source: S&P Global Ratings Credit Research & Insights. | ||||||||||||||||||||||||||||||
Appendix: Data Methodology And Updates
This article constitutes a part of the Explanatory Document disclosed by S&P Global Ratings Japan Inc. pursuant to Article 66-39 of Financial Instruments and Exchange Act and Article 318. The data scope and methodology used for this article are generally consistent with those used for S&P Global Ratings' global corporate and global international public finance default and rating transition studies (see "2022 Annual Global Corporate Default And Rating Transition Study," published on April 25, 2023, for a detailed explanation). However, because of local regulatory considerations, and others, the following methodological differences exist.
Scope of issuers
Global and non-Japanese corporate default and rating transition studies include industrials, utilities, financial institutions, and insurance companies. This article covers these sectors as well as local governments.
Default rate calculation
While our global study calculates default rates on an annual basis, this study calculates default rates on a monthly basis. This means that we formed static pools by grouping issuers by rating category as of the beginning of each month instead of each year. We then calculated the marginal default rates for one month for each static pool and used these one-month marginal default rates to calculate cumulative default rates (see "2022 Annual Global Corporate Default And Rating Transition Study" for details on conditional marginal default rates and cumulative default rates).
Definition of default
Regarding the treatment of 'R' ratings (an obligor rated 'R' is under regulatory supervision owing to its financial condition), this study counts an 'R' rating as a default only if there was a default under S&P Global Ratings' definition. There is one entity in this dataset whose rating was changed to 'R' but that did not default. The rating on Shinsei Bank Ltd. was changed to 'R' from 'NR' in January 1999 (when the bank's name was Long-Term Credit Bank of Japan Ltd.) upon its nationalization, but this study does not recognize that event as a default because the bank did not default. Because our global studies do not separate out 'R' ratings, we have included Shinsei Bank Ltd.'s rating history after the 'R' rating only within this report, while this issuer is not included in the global studies.
Like our global default studies, S&P Global Ratings' ongoing enhancement of the database used to generate this study could lead to outcomes that differ to some degree from those reported in previous studies. However, these enhancements pose no continuity problem because each study is self-contained and effectively supersedes all previous versions.
Effect of mergers and acquisitions on rating histories
If an entity experiences a merger or acquisition, or, in the case of TEPCO, a consolidation into a holding company, the original entity in our study will be moved to the not rated category (NR), and we will include the new entity in the study going forward. Ratings histories associated with the previous entity will not be associated with the new entity going forward.
Comparing Default Rates
The comparison of default studies by different rating agencies requires extreme caution because any differences in the study methodology can result in a significant gap in default rate numbers (see "Japanese Corporate Default And Rating Transitions Study 2008," published on April 1, 2009, for descriptions of some of these differences). Also notable is whether a rating agency considers a bond exchange (including bond repurchase) to be a default. We counted two defaults in 2009 due to distressed bond exchanges by the issuers (see table 14).
Related Research
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The use of the term "methodology" in this article refers to data aggregation and calculation methods used in conducting the research. It does not relate to S&P Global Ratings' methodologies, which are publicly available criteria used to determine credit ratings.
This report does not constitute a rating action.
| Credit Research & Insights: | Nick W Kraemer, FRM, New York + 1 (212) 438 1698; nick.kraemer@spglobal.com |
| Zev R Gurwitz, Albany + 1 (212) 438 7128; zev.gurwitz@spglobal.com | |
| Research Contributor: | Nivritti Mishra Richhariya, CRISIL Global Analytical Center, an S&P Global Ratings affiliate, Mumbai |
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