Hankyu Hanshin Holdings, Inc

NEWS RELEASE

Sep 03, 2020 R&I Affirms A+, Stable: Hankyu Hanshin Holdings, Inc.

Rating and Investment Information, Inc. (R&I) has announced the following: ISSUER: Hankyu Hanshin Holdings, Inc. Issuer Rating: A+, Affirmed Rating Outlook: Stable

RATIONALE: Hankyu Hanshin Holdings, Inc. is the holding company of the Hankyu Hanshin Holdings Group, which focuses on urban transportation and real estate and runs a variety of businesses such as information and communication technology, travel, international transportation and hotels. The rating for the holding company reflects the group creditworthiness. Areas along the railway lines served by group companies Hankyu Corp. and Hanshin Electric Railway Co., Ltd. are popular residential districts which contribute to a continuous population inflow. The Umeda area in Osaka, where the terminal stations for these railways are located, now has a higher concentration of offices as well as commercial facilities. The entire group's earnings base is robust. Railway revenues have been curtailed by the novel coronavirus pandemic, though the earning capacity of the group's railway services in normal times is strong. The real estate segment, which owns a number of properties in Umeda and other areas, enjoys solid streams of income from office leasing. Commercial facilities, on the other hand, have been affected by sales decline at their tenants. The Hanshin Tigers professional baseball team and Takarazuka Revue -- the main attractions of the entertainment segment -- are facing harsh financial circumstances as limits on attendance for their events have been imposed to contain the spread of the coronavirus. But since both entertainments have a strong following, their earnings would start improving once the visitor restrictions are eased. The hotels and travel businesses are suffering a sharp drop in revenues. The impact from a dramatic fall in foreign tourists to Japan and reduced leisure demand is likely to linger for a while. Although Hankyu Hanshin Holdings is working to reduce cost and investment, it is expected to make a certain level of investment through FY2021 (the year ending March 2022). Some of the funds will be poured into the so-called Umeda 1-1 redevelopment project. Recovering cash flow as soon as possible holds the key to maintaining the company's creditworthiness. With the shareholders' equity of 861.8 billion yen and its ratio of 34.9% as of end-June 2020, the company has a firm financial base capable of withstanding the severe business conditions.

The primary rating methodologies applied to this rating are provided at "R&I's Basic Methodology for Corporate Credit Ratings", "Railways" and "R&I's Analytical Approach to Parent and Subsidiary Companies". The methodologies are available at the web site listed below, together with other rating methodologies that are taken into consideration when assigning the rating. https://www.r-i.co.jp/en/rating/about/rating_method.html

R&I RATINGS: ISSUER: Hankyu Hanshin Holdings, Inc. (Sec. Code: 9042) Issuer Rating RATING: A+, Affirmed RATING OUTLOOK: Stable

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Shelf Registration (Bonds) ISSUE AMOUNT (mn): JPY 200,000 ISSUE PERIOD: From Jul 08, 2020 to Jul 07, 2022 RATING: A+, Affirmed (Preliminary)

Gtd. Unsec. Str. Bonds No.40 Issue Date Maturity Date Issue Amount (mn) Sep 22, 2010 Sep 18, 2020 JPY 15,000 RATING: A+, Affirmed

Gtd. Unsec. Str. Bonds No.41 Issue Date Maturity Date Issue Amount (mn) Sep 22, 2010 Sep 22, 2022 JPY 7,000 RATING: A+, Affirmed

Gtd. Unsec. Str. Bonds No.42 Issue Date Maturity Date Issue Amount (mn) Mar 17, 2011 Mar 17, 2021 JPY 10,000 RATING: A+, Affirmed

Gtd. Unsec. Str. Bonds No.46 Issue Date Maturity Date Issue Amount (mn) Oct 25, 2013 Oct 25, 2023 JPY 10,000 RATING: A+, Affirmed

Gtd. Unsec. Str. Bonds No.47 Issue Date Maturity Date Issue Amount (mn) Jul 18, 2014 Jul 18, 2029 JPY 10,000 RATING: A+, Affirmed

Unsec. Str. Bonds No.48 Issue Date Maturity Date Issue Amount (mn) Dec 15, 2016 Dec 15, 2021 JPY 10,000 RATING: A+, Affirmed

Unsec. Str. Bonds No.49 Issue Date Maturity Date Issue Amount (mn) Dec 15, 2016 Dec 15, 2036 JPY 10,000 RATING: A+, Affirmed

Unsec. Str. Bonds No.50 Issue Date Maturity Date Issue Amount (mn) Sep 13, 2018 Sep 13, 2028 JPY 10,000 RATING: A+, Affirmed

Unsec. Str. Bonds No.51 Issue Date Maturity Date Issue Amount (mn) Sep 13, 2018 Sep 13, 2038 JPY 10,000 RATING: A+, Affirmed

Unsec. Str. Bonds No.52 Issue Date Maturity Date Issue Amount (mn) Nov 21, 2019 Nov 21, 2029 JPY 10,000 RATING: A+, Affirmed

Unsec. Str. Bonds No.53 Issue Date Maturity Date Issue Amount (mn) Nov 21, 2019 Nov 19, 2049 JPY 10,000 RATING: A+, Affirmed

Unsec. Str. Bonds No.54 Issue Date Maturity Date Issue Amount (mn) Feb 27, 2020 Feb 27, 2040 JPY 10,000 RATING: A+, Affirmed

Unsec. Str. Bonds No.55 Issue Date Maturity Date Issue Amount (mn) Jul 17, 2020 Jul 14, 2023 JPY 20,000 RATING: A+, Affirmed

Unsec. Str. Bonds No.56 Issue Date Maturity Date Issue Amount (mn) Jul 17, 2020 Jul 17, 2025 JPY 10,000 RATING: A+, Affirmed

Unsec. Str. Bonds No.57 Issue Date Maturity Date Issue Amount (mn) Jul 17, 2020 Jul 17, 2030 JPY 20,000 RATING: A+, Affirmed

A preliminary rating is assigned when a provisional credit rating is needed for an individual obligation on which final terms have not been determined. A credit rating finally assigned may differ from the preliminary rating depending on, among others, the details of the actual contract of the individual obligation.