JCR has assigned a A rating to the bonds to be issued shortly by the issuer under the shelf registration.

Issuer: Orix Corporation (8591)
Issues Amount(bn) Issue Date Due Date Coupon Rating
bonds no.137 Y20 July 27, 2010 July 27, 2015 1.52% A
Covenants: Negative Pledge
Bond Administrator: No
Shelf Registration:
Maximum: Y700 billion
Valid: two years effective from July 25, 2009

<Rationale>
Net income of Orix Corporation for FY2009 ended March 31, 2010 increased 72.2% year-on-year to 37.8 billion yen on the back of reductions in credit costs, impairment loss, and personnel & non-personnel expenses, although its revenue decreased 11.5% year-on-year to 932.8 billion yen. Its D/E ratio has improved from 4.5 times at the end of March 2009 to 3.4 times at the end of March 2010 (from 5.1 times to 4.1 times, inclusive of deposits) by way of reductions in the total assets and interest-bearing debt primarily. It expects its net income to increase for FY2010 ending March 31, 2011 owing mainly to reductions in credit costs and impairment loss to 57 billion yen. JCR considers, however, that it will take some time for the Company to improve its ROA and earnings power. JCR values its strategies such as its focus on services centered on commission revenue from the primary segments, environment-related businesses, and expansion of business in Asia where economies are expected to grow. JCR considers that it can secure a certain level of earnings hereafter, being underpinned by maintenance leasing, retail and overseas business segments. Its intention to retain its deleveraging financial policy by controlling balance sheet and thick equity capital in addition to the underpinning above are supporting factors for the rating. Additionally, the domestic financing environment has become stable now.