Bulletin: Orix's India Renewables Investment Generates Manageable Pressure

TOKYO (S&P Global Ratings) Sept. 14, 2020--S&P Global Ratings today said Japan-based finance company Orix Corp.'s (A-/Negative/--) plan to acquire a stake in a India-based renewable energy business was likely to exert tolerable pressure on its creditworthiness while pushing down its risk-adjusted capital (RAC) ratio. Orix said Sept. 11, 2020, that it plans to acquire a stake of more than 20% in Greenko Energy Holdings (B+/Stable/--) for about US$980 million. If the plan proceeds as planned, we expect Orix's RAC ratio to remain for the coming year or two at levels stably above 10%, the threshold for our current assessment of its capital, leverage, and earnings. The acquisition would likely push down the ratio by about 70 basis points, to

...September 14, 2020 TOKYO (S&P Global Ratings) Sept. 14, 2020--S&P Global Ratings today said Japan-based finance company Orix Corp.'s (A-/Negative/--) plan to acquire a stake in a India-based renewable energy business was likely to exert tolerable pressure on its creditworthiness while pushing down its risk-adjusted capital (RAC) ratio. Orix said Sept. 11, 2020, that it plans to acquire a stake of more than 20% in Greenko Energy Holdings (B+/Stable/--) for about US$980 million. If the plan proceeds as planned, we expect Orix's RAC ratio to remain for the coming year or two at levels stably above 10%, the threshold for our current assessment of its capital, leverage, and earnings. The acquisition would likely push down the ratio by about 70 basis points, to about 10.5%. This is because we apply a high risk weight to investment risk in our calculation of the ratio. Nevertheless, Orix has long kept the ratio above 10%. Therefore, we expect the management of ORIX to continue to handle the increases...

Bulletin