ORIX CORPORATION
Fitch Ratings has assigned
The proceeds will be used for general corporate purposes.
Key Rating Drivers
The notes' rating is aligned with the Long-Term Issuer Default Rating (IDR) of ORIX because the notes constitute the company's direct, unsubordinated and unsecured obligations, and rank equally with all its other unsubordinated and unsecured obligations.
ORIX's Long-Term IDR reflects its strengths, including a longstanding, strong company profile and sound liquidity position. The rating also takes into consideration the pressure on profitability, the complex business portfolio and
The Long-Term IDR also incorporates the challenges in risk management and governance in light of ORIX's complex business model and organisational structure, as it expands across sectors and geographies, which is an ESG factor. We expect ORIX to continue to invest as opportunities arise, although the company will take a cautious approach, considering the uncertainties in the global economic recovery.
We expect ORIX to maintain sound leverage at around 3x, a level that it has sustained over a long period, underpinned by its active capital-recycling strategy and a gradual recovery in profitability after the pandemic. ORIX has a large and diverse business portfolio and investment pipeline that gives it adequate flexibility in its capital-recycling strategy and leverage management.
For in-depth commentary on ORIX's key rating drivers and rating sensitivities, please see 'Fitch Affirms Japan's ORIX at 'A-'; Outlook Stable', published on
Rating Sensitivities
Factors that could, individually or collectively, lead to negative rating action/downgrade:
The rating on the notes will be downgraded if ORIX's Long-Term IDR is downgraded.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
The rating on the notes will be upgraded if ORIX's Long-Term IDR is upgraded. However, prospects for an upgrade of ORIX's IDRs are limited in light of the company's structural complexity and business model.
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
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
ORIX has an ESG Relevance Score of ?4' for Group Structure due to its complex organisational structure with different business lines operating globally, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This 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. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
RATING ACTIONS
Entity / Debt
Rating
senior unsecured
LT
A-
New Rating
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