RAM Ratings has reaffirmed the A1/stable/P1 ratings of ORIX Leasing Malaysia Berhad’s (ORIX Leasing or the Company) CP/MTN Programme of up to RM500 million.

Published on 27 December 2013

RAM Ratings has reaffirmed the A1/stable/P1 ratings of ORIX Leasing Malaysia Berhad’s (ORIX Leasing or the Company) CP/MTN Programme of up to RM500 million. Concurrently, we have also reaffirmed the AAA(bg)/stable/- rating of the Company’s up to RM150 million Bank-Guaranteed MTN Programme as well as the P1 rating of its up to RM150 million CP Programme. The AAA(bg) rating reflects the guarantee from Malayan Banking Berhad, rated AAA/Stable/P1 by RAM. The guarantee enhances the credit profile of this debt facility beyond the Company’s credit strength.
ORIX Leasing is a major domestic player in the SME, hire-purchase (HP) and leasing industry, with close to 40 years of operating track record. The Company is wholly owned by Japan-based ORIX Corporation (the Group), an integrated financial-services group with operations in 35 countries and regions worldwide. As part of the Group, ORIX Leasing benefits from solid parental support through the sharing of technical expertise as well as the provision of shareholder loans and financial guarantees.
ORIX Leasing’s asset quality is viewed to be robust. Following the write-offs in FY Mar 2011 and FY Mar 2012 which were related to lumpy impaired loans that were affected by the global financial crisis, the Company’s GIL ratio has normalised to the pre-crisis levels. Despite rapid receivables growth in the more recent years, ORIX Leasing’s asset quality has not been compromised. The Company’s robust asset-quality indicators bear testimony to its prudent credit culture and stringent monitoring procedures. The value of its gross impaired loans (GILs) has stayed relatively stable in the last 2 years. Given its enlarged receivables base, the Company’s GIL ratio had eased further to 1.9% as at end-March 2013 (end-March 2012: 2.4%). At the same time, its credit-cost ratio came up to 0.2%, complemented by a commendable GIL coverage ratio of 137.9%.
ORIX Leasing’s healthy profit track record is underpinned by its low credit costs, the robust growth of its HP receivables and an increasing proportion of higher-yielding operating leases. ORIX Leasing’s capitalisation remained strong as at end-June 2013, despite its rapid asset expansion; its gearing ratio stood at 2.6 times.

Media contact
Umar Marzuki
(603) 7628 1055
umar@ram.com.my