Mitsubishi Corp.'s Proposed Subordinated Hybrid Loan Rated 'A-' And Assessed "Intermediate" Equity Content

TOKYO (Standard&Poor's) July 7, 2015--Standard&Poor's Ratings Services today said that it has assigned its 'A-' issue rating to the proposed unsecured subordinated hybrid loan of Mitsubishi Corp. (A+/Stable/A-1), a Japan -based general trading and investment company. We arrive at our 'A-' issue rating on the proposed loan by notching down from our 'A+' long-term corporate credit rating on Mitsubishi. The two-notch differential reflects our notching methodology, whereby we deduct one notch for the subordination of the loan and one additional notch for the issuer's option to defer interest payment. We classify the proposed loan as having "intermediate" equity content until 2022. Its characteristics--the issuer's option to defer interest payments; sufficient permanence; and subordination in liquidation or

...TOKYO (Standard & Poor's) July 7, 2015--Standard & Poor's Ratings Services today said that it has assigned its 'A-' issue rating to the proposed unsecured subordinated hybrid loan of Mitsubishi Corp. (A+/Stable/A-1), a Japan -based general trading and investment company. We arrive at our 'A-' issue rating on the proposed loan by notching down from our 'A+' long-term corporate credit rating on Mitsubishi. The two-notch differential reflects our notching methodology, whereby we deduct one notch for the subordination of the loan and one additional notch for the issuer's option to defer interest payment. We classify the proposed loan as having "intermediate" equity content until 2022. Its characteristics--the issuer's option to defer interest payments; sufficient permanence; and subordination in liquidation or bankruptcy proceedings--meet our standards for "intermediate" equity content of hybrid capital instruments. KEY FACTORS IN OUR ASSESSMENT OF THE LOAN'S DEFERABILITY Mitsubishi retains...

Ratings Action