Published on 18 January 2013
RAM Rating Services has
reaffirmed the AAA(bg) rating of ORIX Leasing Malaysia Berhad’s (“ORIX Leasing”
or “the Company”) up to RM150 million Bank-Guaranteed Medium-Term Notes
(“BGMTN”) Programme and the P1 rating of its up to RM150 million Commercial Papers
Programme; the long-term rating has a stable outlook. The AAA(bg) rating
reflects the strength of the irrevocable and unconditional guarantee from
Malayan Banking Berhad, rated AAA/Stable/P1 by RAM. The bank guarantee for ORIX
Leasing’s BGMTN Programme enhances the credit profile of this debt facility
beyond the Company’s stand-alone credit risk.
ORIX Leasing is the largest
leasing company in Malaysia. It has been exhibiting healthy asset quality
through the last few years, with its adjusted gross impaired-loan (“GIL”) ratio
easing to 2.0% as at end-September 2012 (end-March 2011: 3.9%), backed by a
higher amount of written-off GILs, recoveries and strong receivables growth in
fiscal 2012. At the same time, its credit-cost ratio had normalised to an annualised
0.2% after having recorded net write-backs for the past 3 years due to
recoveries. While we note that ORIX Leasing has substantial exposure to small
and medium-sized enterprises (this sector is often more susceptible to economic
downturns), the Company has maintained its healthy asset quality given the
management’s prudent credit culture.
In fiscal 2012, ORIX Leasing’s
pre-tax profit climbed up 20.5% year-on-year to RM109.3 million, driven by
stronger receivables growth, a broader net interest margin and more robust
lease rental income. Given its inability to accept deposits, the Company relies
on bank borrowings, the debt capital market and loans from shareholder to fund
its operations. As at end-September 2012, its gearing ratio stood at a manageable
2.2 times while its capitalisation level remained strong with a
capital-adequacy ratio of 29.0%.
Media contact
Cheong Kah Weng
(603) 7628 1113
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