Standard & Poor’s Corp. has assigned a BBB long-term credit rating to the $1 billion subordinated notes due in June 2011 that Sanwa Bank will issue in June.
The long-term counterparty rating on Sanwa is BBB+ and the outlook on the rating is stable, the U.S. credit-rating agency said Thursday.
“The rating on Sanwa is based on the company’s solid market position and good liquidity. However, the bank’s capitalization and profitability are weak by international standards, while its asset quality is pressured by the stagnant domestic economy,” the agency said.
S&P noted that Sanwa’s merger with Tokai Bank next January will boost Sanwa’s market position, but noted its profitability will probably remain under pressure for some time by the increasingly severe competition in the Japanese financial sector.
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