LONDON, Feb. 6 /PRNewswire/ -- Standard & Poor's today lowered its rating
to 'BBB+' from 'A-' on the $475 million limited recourse secured floating-rate
securities series 2-B issued by Sovereign Investment Securities Two Ltd. At
the same time the rating was removed from CreditWatch with negative
implications, where it had been placed on Nov. 29, 2001.
The action follows the lowering of the long-term credit ratings on Bank of
Tokyo-Mitsubishi Ltd. to 'BBB+' from 'A-' with a negative outlook on Feb. 5,
2002. Bank of Tokyo-Mitsubishi acts as a supporting rating to the notes
issued by Sovereign Investment Securities Two Ltd.
The lowering of Bank of Tokyo-Mitsubishi's rating reflects further
deterioration in the financial profile of Bank of Tokyo-Mitsubishi -- and the
Japanese banking system, in general -- stemming from the high and growing
level of impaired assets, insufficient core earnings to meet credit costs, and
widening shortfalls in capital to offset losses imbedded in impaired assets
and fund ongoing operations.
The rating is underpinned by system support, including potential support
from the Japanese government, in the form of a further infusion of funds from
its crisis management account. However, additional capital injections alone
would not resolve the problems for Bank of Tokyo-Mitsubishi, as for the
Japanese banking system as a whole, unless the Bank of Tokyo-Mitsubishi
reforms its lending practices, strengthens corporate governance, and improves
profitability.
A copy of related press releases can be found on Standard & Poor's
Web-based credit analysis system, at http://www.ratingsdirect.com.
SOURCE Standard & Poor's
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CONTACT:
Perry Inglis, +44-20-7826-3857, or Rebecca
Geen, +44-20-7826-3669, both of Standard & Poor's, London
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