Fitch Ratings has assigned Japan-based Mizuho Financial Group, Inc.'s (Mizuho, A-/Stable) EUR750 million 10-year senior unsecured notes a rating of 'A-'.

The notes will count towards Mizuho's total loss-absorbing capacity (TLAC) requirements, as they will be structurally subordinated to the senior liabilities of its subsidiaries. Mizuho met the 18% minimum total external TLAC capital ratio requirement, which excludes buffers for global systemically important banks, capital conservation and countercyclical capital, as of end-December 2023.

We expect the company to continue to issue TLAC-eligible debt as required, including to refinance maturing debt, to comfortably meet the requirement with a buffer. Mizuho will downstream the net proceeds of the notes to Mizuho Bank, Ltd. (A-/Stable) as a senior unsecured obligation to qualify as internal TLAC under Japan's TLAC standard for the subsidiary.

Key Rating Drivers

The rating on the notes is aligned with Mizuho's Long-Term Issuer Default Rating (IDR), despite the notes' structural subordination features. Fitch aligns Mizuho's holding-company senior debt ratings and IDRs with the IDRs of its operating companies. This reflects Fitch's view of consolidated supervision and that the holding company's failure and senior-level default risk are similar to that of the wholly owned operating banks, with all entities being eligible for pre-emptive state support. It also takes into account the group's interconnectedness and low holding-company double leverage.

See Fitch Affirms Mizuho Financial Group and Subsidiaries at 'A-'; Outlook Stable, dated 12 October 2023 for commentary on Mizuho's key rating drivers and rating sensitivities.

Rating Sensitivities

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

The instrument ratings will be downgraded if Mizuho's Long-Term IDR is downgraded.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

The instrument ratings will be upgraded if Mizuho's Long-Term IDR is upgraded.

Summary of Financial Adjustments

Total assets and total liabilities exclude acceptances and guarantees from Japan's generally accepted accounting principles balance sheet to be globally comparable.

Sources of Information

The principal sources of information used in the analysis are described in the applicable criteria.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/topics/esg/products#esg-relevance-scores

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