(Bloomberg) -- Norinchukin Bank’s measures to bolster capital are “credit positive” even as the Japanese company remains on review for downgrade, according to Moody’s Ratings.
The bank’s steps to enhance capital have “no immediate impact” on the firm’s long-term debt rating of A1, the fifth-highest investment grade, Moody’s said in a statement Monday.
Norinchukin last week announced a ¥413 billion ($2.9 billion) loss in the fiscal first quarter as the unlisted lender offloaded bonds that had become unprofitable. The company is raising about ¥1.3 trillion in fresh capital from farming cooperatives, it said.
“The capital raising reflects strong support from the bank’s member cooperatives, in times of need,” Moody’s said.
Any downgrade by Moody’s may put pressure on Norinchukin’s borrowing costs, which exceed the returns on much of its foreign bond portfolio. S&P Global Ratings has also cut its outlook on the bank’s debt to negative, citing earnings risks.
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