JCR has affirmed the BBB+/Stable rating on senior debts of the issuer.

Issuer: Matsuda Sangyo Co., Ltd. (7456)
Senior debts: BBB+/Stable

<Rationale>
Matsuda Sangyo Co., Ltd. conducts a precious metal related business and a food related business. Although its core precious metal related business is unlikely to fall into the red because margins of precious metal recycling are its primary earnings sources, the Company was forced to lower its earnings owing to large production adjustment by semiconductor and electronic component manufacturers under the pressure of the worldwide recession. Although its earnings are now on the road to recovery owing to recovery of semiconductor and electronic components production after spring of 2009, the corrected amount of raw materials for precious metal recycling remains a little more than 80% of the peak amount before the worldwide recession. Therefore, JCR considers that the Company should increase the correction amount including that from overseas. On the other hand, its food related business are producing s stable earnings level in the face of lowering selling price. Its financial structure is sound as indicated by the ready liquidity exceeding the interest-bearing debt and a high ratio of equity capital to total assets, which stood at 63%, at the end of March 2010. JCR considers that the Company can secure a satisfactory earnings and cash flow centering on those of the precious recycling, in which it has a high competitive strength, owing to the recovery of semiconductor and electronic components production. JCR will pay attention to expansion in the corrected amount of precious metal recycling raw materials and progress in the renewal and improving efficiency in production facilities in Japan hereafter.