Nikko Cordial ratings on CreditWatch developing on Citigroup bid - S&P |
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Tue, 06 Mar 2007 16:00
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TOKYO (AFX) - Standard & Poor's Ratings Services said it has placed its 'BBB-' long-term counterparty credit and senior unsecured debt ratings on Japanese brokerage firm Nikko Cordial on CreditWatch with developing implications after Citigroup said it will acquire a 50 pct stake in the group for up to 1.25 trln yen.The agency said it has also placed its 'A-3' short-term counterparty credit rating on Nikko Cordial, its 'BBB' long-term counterparty credit and 'A-2' short-term counterparty credit ratings on Nikko Cordial Securities Inc, and its 'A' long-term counterparty credit rating on NikkoCiti Trust & Banking on CreditWatch with developing implications'Nikko Cordial group's operating base suffered a blow from the impact of faulty accounting practices,' said S&P.'If the takeover bid proceeds according to plan, the heightening concerns over Nikko Cordial group's reputation risk and fundraising will recede, as the group will be backed by Citigroup's creditworthiness.'Nikko Cordial is also expected to see profit growth from the strengthening of its ties with Citigroup, it added, and as a result the company may be upgraded 'by a few notches'.However, the degree of the upgrade depends on Citigroup's ownership percentage following the takeover bid, cohesiveness with the Nikko Cordial group, and strategies going forward, it said.'Conversely, if the takeover bid fails to solidify, and Citigroup's support for the Nikko Cordial group becomes unclear, the ratings on the Nikko Cordial group companies may be affirmed or even lowered,' S&P added.newsdesk@afxnews.comjsa/harCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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Japan's Nikko Cordial's ratings may benefit from Citigroup enlarging stake - S&P 