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's Ratings Services today assigned its 'A-' debt ratings to the 44th and 45th series of unsecured straight bonds issued by Hitachi Capital Corp. (Hitachi Capital; A-/Stable/A-2) (see list below).

Hitachi Capital is one of Japan's major leasing companies and a member of the Hitachi group led by Hitachi Ltd. (Hitachi; BBB+/Positive/A-2). About 20% of Hitachi Capital's total receivables are related to business transactions with group companies and employees. The company's core business is financing, such as leasing to Japanese corporations and auto loans. The company has also been growing its overseas businesses in recent years. Hitachi Capital's business structure is relatively diversified for a Japanese leasing company.

Standard & Poor's regards Hitachi Capital as a strategically important subsidiary within the Hitachi group, given its strong connection to the group in terms of business, finance, and capital. As such, Hitachi Capital's credit quality will be affected by changes in Hitachi's creditworthiness. However, we do not regard the credit quality of the two companies to be unified because Hitachi Capital's business portfolio is somewhat independent of the Hitachi group. Therefore, the current ratings on Hitachi Capital exceed that on Hitachi by one notch.

As domestic corporations rein in capital expenditure, demand for financing has remained stagnant and squeezed Hitachi Capital's revenues. However, we expect the company to maintain its stable financial position, supported by its solid customer base and relatively sound asset quality. We also expect it to maintain its strong relationships with its parent company and group companies in terms of business, finance, and capital.

Hitachi Capital's capitalization is at an adequate level relative to its financial risk. Meanwhile, its asset risk is rising due to its investments, and it is overhauling its risk management system. These two areas will remain key factors in our credit analysis of the company, since it plans to make strategic investments targeting a stronger business profile and sustainable 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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