JCR has removed the long-term and CP ratings on the issuer from Credit Monitor with Positive direction, and has upgraded the long-term ratings from #A-/Positive to A and has affirmed the J-1 rating on the CP program. The rating outlook is Stable.

Issuer: Cedyna Financial Corporation (8258)
Upgraded:
Senior debts: A/Stable
Shelf Registration: preliminary A
Maximum: Y50 billion
Valid: two years effective from January 26, 2010

Affirmed:
CP: J-1
Maximum: Y300 billion
Backup Line: 0%

<Rationale>
JCR placed the ratings on Cedyna Financial Corporation under Credit Monitor with Positive direction on January 7, 2010 after its announcement that the Company would raise approximately 50 billion yen through a third-party allocation of newly issued shares to Sumitomo Mitsui Financial Group Inc. ("SMFG") and would be a consolidated subsidiary of SMFG. The special resolution to approve the plan was passed at its extraordinary general meeting of shareholders held on March 12, 2010. The Company will be a consolidated subsidiary of SMFG (a 67 percent equity position) after the payment of capital contribution on May 31, 2010.

The Company also announced on March 30, 2010 that Mr. Hajime Yamashita, who is from SMFG and Representative Director and Executive Vice President of Sumitomo Mitsui Card Company, Limited, would be Representative Director and President after obtaining shareholders' approval at its regular general meeting of shareholders to be held on June 23, 2010. Our upward rating revision by one notch reflects its closer relationship with SMFG in terms of capital and human resources and stronger position in SMFG and JCR removed the ratings from the Credit Monitor. Our "Stable" outlook reflects possible support from SMFG.

The Company's net loss for FY 2009 ended March 31, 2010 reached 67.8 billion yen, mainly because of an increase in provision for losses on refunds of interest received from customers. The Company's effective measure to prevent earnings fluctuations, which may be caused by interest payment refund claims, in and after FY 2010 ending March 31, 2011, is a supporting factor of the ratings. On the other hand, its net assets will amount to approximately 92 billion yen and its consolidated ratio of equity capital to total assets will be approximately four percent after the capital increase. Thus the rating is restrained by the adequacy of its equity capital. JCR considers it necessary for the Company to achieve its profit targets prescribed in its medium-term business plan and accumulate capital steadily.