(The following statement was released by the rating agency)
Nov 20 - Changes that Toru Hashimoto, mayor of the City of Osaka
(AA-/Negative/A-1+), is pursuing could spark a reorganization of not only Osaka but also the
operation and financing of infrastructure elsewhere in Japan, Standard & Poor's Ratings Services
said in a Credit FAQ published today.
Hashimoto is a reformer with plans to privatize the city-run subway network, charge for
discount passes now issued free to seniors, and cut almost half of the city's workforce from
38,000 in 2011 to 19,350 in 2015. Mr. Hashimoto, who took office in December 2011, also aims to
dissolve the city and reorganize it as a number of wards under the name "Osaka Metropolitan
"He has already completed some of his agenda and enjoys wide political support in Osaka and
neighboring districts, which we believe will help him continue his makeover of the
municipality," said Tokyo-based Standard & Poor's credit analyst Kumiko Kakimoto.
Standard & Poor's Ratings Services considers Osaka's financial management positive for its
ratings on the city, which benefit from excellent transparency and disclosure, long-term capital
and financial planning, and excellent reserve and liquidity management. While reforms to
streamline the city's government-related entities (GREs) continue, we regard its management of
these entities as moderate.
"Whether Mr. Hashimoto's success will materially affect our ratings on the city is the focus
of our analysis, but we also think it could more widely influence the operation and financing of
infrastructure in Japan," Kakimoto said.