TEXT-S&P Rates Hitachi Capital's Series 44 And 45 Straight Bonds

(The following was released by the rating agency)

TOKYO (Standard & Poor's) Oct. 11, 2012--Standard & Poor'sRatings Services today assigned its 'A-' debt ratings to the44th and 45th series of unsecured straight bonds issued byHitachi Capital Corp. (Hitachi Capital; A-/Stable/A-2) (see listbelow).

Hitachi Capital is one of Japan's major leasing companiesand a member of the Hitachi group led by Hitachi Ltd. (Hitachi;BBB+/Positive/A-2). About 20% of Hitachi Capital's totalreceivables are related to business transactions with groupcompanies and employees. The company's core business isfinancing, such as leasing to Japanese corporations and autoloans. The company has also been growing its overseas businessesin recent years. Hitachi Capital's business structure isrelatively diversified for a Japanese leasing company.

Standard & Poor's regards Hitachi Capital as a strategicallyimportant subsidiary within the Hitachi group, given its strongconnection to the group in terms of business, finance, andcapital. As such, Hitachi Capital's credit quality will beaffected by changes in Hitachi's creditworthiness. However, wedo not regard the credit quality of the two companies to beunified because Hitachi Capital's business portfolio is somewhatindependent of the Hitachi group. Therefore, the current ratingson Hitachi Capital exceed that on Hitachi by one notch.

As domestic corporations rein in capital expenditure, demandfor financing has remained stagnant and squeezed HitachiCapital's revenues. However, we expect the company to maintainits stable financial position, supported by its solid customerbase and relatively sound asset quality. We also expect it tomaintain its strong relationships with its parent company andgroup companies in terms of business, finance, and capital.

Hitachi Capital's capitalization is at an adequate levelrelative to its financial risk. Meanwhile, its asset risk isrising due to its investments, and it is overhauling its riskmanagement system. These two areas will remain key factors inour credit analysis of the company, since it plans to makestrategic investments targeting a stronger business profile andsustainable growth.

RATING LIST Rating Assigned Issue Rating Series 44 JPY10 bil., 0.421% , due on Dec. 20, 2017 A- Series 45 JPY10 bil., 0.666% , due on Dec. 20, 2019 A- RELATED CRITERIA AND RESEARCH

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