...February 21, 2023 TOKYO (S&P Global Ratings) Feb. 22, 2023--S&P Global Ratings today said it will classify Japan-based diversified finance company Orix Corp.'s (A-/Negative/--) proposed subordinated loan as having intermediate equity content. This follows Orix's announcement today that it will raise Ñ34 billion through a subordinated loan. We classify the loan as having intermediate equity content until the first callable date in 2028 when its remaining period to effective maturity shrinks to less than 20 years. We consider the step-up date as the effective maturity date. The characteristics of the subordinated loan--the borrower's option to defer interest payments, a sufficiently long residual time, and subordination in liquidation or bankruptcy proceedings--meet our standards for deeming it as having intermediate equity content. Orix retains the option to defer interest payments on the loan. Any outstanding deferred interest is cumulative and will be settled in cash if the borrower pays...
