Fitch Rates Nomura Bank International's Guaranteed Note Programme 'A-'

Mon Mar 17, 2014 11:07pm EDT

Related Topics

(The following statement was released by the rating agency) TOKYO/HONG KONG/SINGAPORE, March 17 (Fitch) Fitch Ratings has assigned an 'A-' rating to Nomura Bank International plc's (NBI) programme for the issuance of senior unsecured notes (the programme) that was renewed on 14 March 2014. The programme rating applies only to notes guaranteed by Nomura Holdings, Inc. (NHI, A-/Stable) (the guaranteed notes). The rating does not cover unguaranteed notes and other instruments issued under the programme. NBI will issue guaranteed and unguaranteed notes and redeemable certificates of up to USD2.5bn under the programme. The notes will constitute direct, unconditional, unsubordinated and unsecured obligations of NBI, and rank pari passu equally with all other unsecured and unsubordinated obligations. The proceeds will be used for general corporate purposes. UK-based NBI is a wholly owned subsidiary of Nomura Europe Holdings plc, which in turn is a wholly owned subsidiary of NHI. NBI is primarily engaged in supporting the global wholesale business function of Nomura, the largest securities group in Japan. KEY RATING DRIVERS The rating of the guaranteed notes is aligned with the Long-Term Issuer Default Ratings (IDRs) of NHI because the payment of principal, interest and all other amounts payable are unconditionally and irrevocably guaranteed by NHI. NHI's Long-Term IDRs are driven by the Support Rating Floor (SRF) of 'A-', the minimum Long-Term IDR floor indicated by its Support Rating (SR) of '1'. The SR is based on Fitch's belief that the authorities would view NHI as systemically important in the domestic economy and its failure would lead to serious disruption in markets, and as a consequence, the probability of the government's support, in the case of need, is extremely high. Therefore, Fitch believes that support can be factored into NHI's ratings because under Japan's Deposit Insurance Law, when a serious systemic disruption is anticipated, the government can pre-emptively provide financial assistance to a solvent financial holding company (Specified Measure 1 of Article 126-2). RATING SENSITIVITIES The rating on the programme would be directly affected by changes to NHI's Long-Term IDRs or modifications to the description of the guarantee. A change in Fitch's assessment of the Japanese government's propensity to support, and/or the systemic importance of NHI derived from factors such as increased substitutability of an entity due to downsizing of operations and/or transactions, could result in the downgrade of NHI's SRF. This, in turn, would lead to the downgrade of NHI's Long-Term IDRs and the programme. Contact: Primary Analyst Miki Murakami Director +81 3 3288 2686 Fitch Ratings Japan Limited Kojimachi Crystal City East Wing 3F 4-8 Kojimachi, Chiyoda-ku, Tokyo 102-0083 Secondary Analyst Chikako Horiuchi Director +852 2263 9924 Fitch (Hong Kong) Limited 2801, Tower Two, Lippo Centre, 89 Queensway, Hong Kong Committee Chairperson Mark Young Managing Director +65 6796 7229 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, "Global Financial Institutions Rating Criteria", dated 31 January 2014 and "Securities Firms Criteria", dated 31 January 2014, are available at www.fitchratings.com. Related Research "Japan: Support for Systemically Important NBFIs" (29 October 2013) Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here Securities Firms Criteria here Japan: Support for Systemically Important NBFIs here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

FILED UNDER: