Bulletin: Orix Transfer Of Greenko Shares Will Secure Capital Buffer

This report does not constitute a rating action. TOKYO (S&P Global Ratings) Jan. 21, 2025--Orix will secure capital buffer if its transfer of shares in Greenko Energy Holdings goes ahead. Orix Corp. (BBB+/Stable/--) announced on Jan. 20, 2025, that it had agreed to transfer all its shares in equity-method affiliate Greenko to a related company for approximately $1.462 billion. It also plans to underwrite convertible notes of AM Green, a next-generation energy production business company, for $731 million. The transaction will improve Japan-based Orix's risk-return and provide a capital buffer for future business growth, in our view. At the end of March 2024, the diversified finance company's risk-adjusted capital (RAC) ratio was 9.6%. We estimate that the transaction will improve

...January 21, 2025 This report does not constitute a rating action. TOKYO (S&P Global Ratings) Jan. 21, 2025--Orix will secure capital buffer if its transfer of shares in Greenko Energy Holdings goes ahead. Orix Corp. (###+/Stable/--) announced on Jan. 20, 2025, that it had agreed to transfer all its shares in equity-method affiliate Greenko to a related company for approximately $1.462 billion. It also plans to underwrite convertible notes of AM Green, a next-generation energy production business company, for $731 million. The transaction will improve Japan-based Orix's risk-return and provide a capital buffer for future business growth, in our view. At the end of March 2024, the diversified finance company's risk-adjusted capital (RAC) ratio was 9.6%. We estimate that the transaction will improve the ratio by more than 0.6 percentage point. However, we forecast that the RAC ratio will remain at 9.5%-10% over the next two years or so, as the increase will likely be temporary. Given Orix's...

Bulletin