Moody's cuts Nomura ratings, follows other agencies

HONG KONG May 27 (Reuters) - Moody's became the last of the major credit agencies this year to downgrade its rating for Nomura Holdings (8604.T) on Wednesday, citing the earnings "challenges" facing Japan's largest brokerage.

Moody's cut its issuer rating for Nomura by two notches to "Baa2", or the ninth-highest investment-grade rating. That puts Nomura in line with Fitch's "BBB" rating, although Standard & Poor's has the broker one notch higher at "BBB-plus."

Both of Moody's rivals downgraded Nomura in January.

Moody's also announced it was downgrading the senior unsecured debt of unit Nomura Securities by two notches to "Baa1". The short-term debt ratings for both Nomura Securities and Nomura Holdings were also cut.

The outlook is stable for all.

Nomura Holdings posted a $2.2 billion quarterly loss last month as it shouldered the costs of integrating Lehman Brothers after purchasing in September the Asian, European and Middle East operations of the collapsed U.S. broker. [ID:nT1801]

The acquisition came amid a challenging global capital market environment, although the takeover of parts of Lehman has given Nomura a stronger pipeline for new deals.

"The downgrade reflects Moody's expectation that the challenges to stabilising earnings will continue, given a persistently difficult operating environment," said Moody's in a statement.

Moody's added that Nomura Holdings would need more time to see "solid" revenue and earnings, especially from overseas, and expressed concern about the continued uncertainties lingering for Nomura from its Lehman purchase.

Besides integration costs, Nomura has also booked losses on its exposure to Iceland's economic implosion, Fortress Investment Group (FIG.N) and disgraced investor Bernard Madoff.

"Even though NHI substantially reduced its legacy illiquid positions as well as problem assets, further deterioration in the global investment climate may force the company to post additional losses, further delaying its earnings recovery," Moody's said of Nomura Holdings.

Both S&P and Fitch cited similar reasons to justify their downgrades this year. (Reporting by Rafael Nam; Editing by Chris Lewis)