(The following statement was released by the rating agency)
Sept 19 - Standard & Poor's Ratings Services today assigned its 'AA-' debt rating to the
U.S. dollar-denominated government-guaranteed notes issued by Development Bank of Japan Inc.
(A+/Negative/A-1). The US$500 million notes, due Sept. 25, 2019, carry a
coupon rate of 1.625%. The rating on the notes reflects the unconditional and
irrevocable guarantee of the government of Japan (AA-/Negative/A-1+).
The rating on DBJ reflects its status as a government-related entity (GRE) and
a financial institution that is 100% owned by the government, as well as our
assessment of its stand-alone credit profile (SACP). Because of its critical
policy role, we believe DBJ has an "extremely high" likelihood of receiving
extraordinary support from the government of Japan.
DBJ has a track record of extending investment and financing expertise in
areas such as community development and revitalization, environmental
conservation, and technological innovation, owing to its status as a GRE. The
bank has also instituted emergency measures to deal with the global financial
and economic crisis, and disasters including the Great East Japan Earthquake
on March 11, 2011, which are difficult for private financial institutions to
manage. In DBJ's implementation of emergency measures, it has received
financial support from the government, such as liquidity support and
additional capital. However, the rating on DBJ is constrained by potential
weakening of its relationship with the government over the long term under the
current full privatization plan. Although our assessment of DBJ's SACP
reflects its good capitalization and limited market risk, its credit risk
concentration on large-lot borrowers following the earthquake has risen
relative to its earnings and capital and we view the increase as a risk
factor. We also see another risk factor for DBJ in the worsening financial
performance of a large-lot borrower that has been receiving government support.
RELATED CRITERIA AND RESEARCH
Rating Government-Related Entities: Methodology And Assumptions, Dec. 9, 2010
Principles Of Credit Ratings, Feb. 16, 2011
Banks: Rating Methodology And Assumptions, Nov. 9, 2011