Orix Considers Ending Moody’s Contract After Downgrade Review

Orix Corp. (8591), the Japanese financial firm under review for a three-level downgrade by Moody’s Investors Service, said it may end its contract with the rating company because such an assessment wouldn’t reflect Orix’s business performance.

Chief Financial Officer Haruyuki Urata would ask Moody’s to withdraw its rating should it go ahead with a cut of that size, he said yesterday through Orix spokesman Atsushi Horii. Moody’s said on March 19 that it may lower Orix from the current A3 to Baa3, the lowest investment grade, to reflect changes to the rating company’s method for evaluating non-bank financial firms.

Orix plans to sell about 270 billion yen ($3.4 billion) in bonds this year as it grows in Asia and the Americas, Urata said last month. The absence of Moody’s ratings would have little impact on Orix’s funding because it issues most of its bonds in yen and domestic investors rely on ratings by Japanese companies, said Yusuke Ueda, a credit strategist at Bank of America Corp.

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