Mitsubishi Chemical Holdings:R&I Affirms A/A-1, Stable

NEWS RELEASE

Apr 26, 2021 R&I Affirms A/a-1, Stable: Mitsubishi Chemical Holdings Corp.

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

Commercial Paper: a-1, Affirmed

RATIONALE: Mitsubishi Chemical Holdings Corp. (MCHC) is the holding company of the MCHC Group, which develops businesses in three domains: performance products, industrial materials and health care. MCHC wholly owns Mitsubishi Chemical Corp., Japan's largest chemical company, and Mitsubishi Tanabe Pharma Corp. It also holds more than a 50% stake in Nippon Sanso Holdings Corp. (Sec. Code: 4911, Issuer Rating: A-). The rating reflects the group creditworthiness. The Group offers many competitive performance products backed by its extensive technologies. The earnings base of the industrial gas segment is globally well-diversified. In the chemicals segment, it commands the largest global share for methyl methacrylate (MMA). Despite its quality business portfolio, the Group suffered an earnings decline in the first half of 2020 due primarily to decreased sales of automobile-related products and a weak MMA market. Since the second half of the year, its earning capacity has been on a recovery path driven by a clear rebound in product demand, but is not sufficient for the rating. As a result of a series of strategic investments, including taking full control of Mitsubishi Tanabe Pharma, MCHC's net debt increased to approximately 2.2 trillion yen as of end-December 2020. With a net debt to equity ratio of around 1.9x, its financial balance is not as sound as the rating suggests. Amid the COVID-19 pandemic, there is a delay in the progress of a financial improvement plan. MCHC intends to lower the ratio to close to 1x in FY2023 (the year ending March 2024) through asset efficiency enhancement and other initiatives. Under its new medium-term management plan APTSIS 25 that covers a five-year period through FY2025, MCHC will focus on measures to bolster the business foundations of the existing fields in the first two years and pursue business transformation in earnest in the remaining three years. R&I will keep an eye on the company's management strategies and developments in financial management.

The primary rating methodologies applied to this rating are provided at "R&I's Basic Methodology for Corporate Credit Ratings", "Chemicals" 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: Mitsubishi Chemical Holdings Corp. (Sec. Code: 4188) Issuer Rating RATING: A, Affirmed RATING OUTLOOK: Stable

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Shelf Registration (Bonds) ISSUE AMOUNT (mn): JPY 400,000 ISSUE PERIOD: From Sep 08, 2020 to Sep 07, 2022 RATING: A, Affirmed (Preliminary)

Unsec. Str. Bonds No.2 Issue Date Maturity Date Issue Amount (mn) Sep 12, 2011 Sep 10, 2021 JPY 10,000 RATING: A, Affirmed

Unsec. Str. Bonds No.9 Issue Date Maturity Date Issue Amount (mn) Jun 04, 2013 Jun 02, 2023 JPY 10,000 RATING: A, Affirmed

Unsec. Str. Bonds No.12 Issue Date Maturity Date Issue Amount (mn) Dec 12, 2013 Dec 12, 2023 JPY 15,000 RATING: A, Affirmed

Unsec. Str. Bonds No.14 Issue Date Maturity Date Issue Amount (mn) Jun 17, 2014 Jun 17, 2021 JPY 15,000 RATING: A, Affirmed

Unsec. Str. Bonds No.15 Issue Date Maturity Date Issue Amount (mn) Jun 17, 2014 Jun 17, 2024 JPY 15,000 RATING: A, Affirmed

Unsec. Str. Bonds No.16 Issue Date Maturity Date Issue Amount (mn) Jun 04, 2015 Jun 03, 2022 JPY 10,000 RATING: A, Affirmed

Unsec. Str. Bonds No.17 Issue Date Maturity Date Issue Amount (mn) Jun 04, 2015 Jun 04, 2025 JPY 10,000 RATING: A, Affirmed

Unsec. Str. Bonds No.19 Issue Date Maturity Date Issue Amount (mn) Dec 03, 2015 Dec 02, 2022 JPY 10,000 RATING: A, Affirmed

Unsec. Str. Bonds No.20 Issue Date Maturity Date Issue Amount (mn) Dec 03, 2015 Dec 03, 2025 JPY 10,000 RATING: A, Affirmed

Unsec. Str. Bonds No.21 Issue Date Maturity Date Issue Amount (mn) Jun 09, 2016 Jun 09, 2021 JPY 10,000 RATING: A, Affirmed

Unsec. Str. Bonds No.22 Issue Date Maturity Date Issue Amount (mn) Jun 09, 2016 Jun 09, 2026 JPY 10,000 RATING: A, Affirmed

Unsec. Str. Bonds No.23 Issue Date Maturity Date Issue Amount (mn) Jun 09, 2016 Jun 09, 2036 JPY 20,000 RATING: A, Affirmed

Unsec. Str. Bonds No.24 Issue Date Maturity Date Issue Amount (mn) Feb 27, 2018 Feb 25, 2028 JPY 15,000 RATING: A, Affirmed

Unsec. Str. Bonds No.25 Issue Date Maturity Date Issue Amount (mn) Feb 27, 2018 Feb 26, 2038 JPY 15,000 RATING: A, Affirmed

Unsec. Str. Bonds No.26 Issue Date Maturity Date Issue Amount (mn) Dec 19, 2018 Dec 19, 2028 JPY 12,000 RATING: A, Affirmed

Unsec. Str. Bonds No.27 Issue Date Maturity Date Issue Amount (mn) Dec 19, 2018 Dec 17, 2038 JPY 8,000 RATING: A, Affirmed

Unsec. Str. Bonds No.28 Issue Date Maturity Date Issue Amount (mn) Dec 19, 2018 Dec 18, 2048 JPY 5,000 RATING: A, Affirmed

Unsec. Str. Bonds No.29 Issue Date Maturity Date Issue Amount (mn) May 30, 2019 May 30, 2029 JPY 10,000 RATING: A, Affirmed

Unsec. Str. Bonds No.30 Issue Date Maturity Date Issue Amount (mn) May 30, 2019 May 30, 2039 JPY 12,000 RATING: A, Affirmed

Unsec. Str. Bonds No.31 Issue Date Maturity Date Issue Amount (mn) May 30, 2019 May 28, 2049 JPY 8,000 RATING: A, Affirmed

Unsec. Str. Bonds No.32 Issue Date Maturity Date Issue Amount (mn) Feb 28, 2020 Feb 26, 2027 JPY 20,000 RATING: A, Affirmed

Unsec. Str. Bonds No.33 Issue Date Maturity Date Issue Amount (mn) Feb 28, 2020 Feb 28, 2030 JPY 20,000 RATING: A, Affirmed

Unsec. Str. Bonds No.34 Issue Date Maturity Date Issue Amount (mn) Feb 28, 2020 Feb 28, 2040 JPY 30,000 RATING: A, Affirmed

Unsec. Str. Bonds No.35 Issue Date Maturity Date Issue Amount (mn) Jun 11, 2020 Jun 11, 2025 JPY 25,000 RATING: A, Affirmed

Unsec. Str. Bonds No.36 Issue Date Maturity Date Issue Amount (mn) Jun 11, 2020 Jun 11, 2030 JPY 15,000 RATING: A, Affirmed

Unsec. Str. Bonds No.37 Issue Date Maturity Date Issue Amount (mn) Jun 11, 2020 Jun 11, 2040 JPY 10,000 RATING: A, Affirmed

Unsec. Str. Bonds No.38 Issue Date Maturity Date Issue Amount (mn) Nov 27, 2020 Nov 27, 2030 JPY 10,000 RATING: A, Affirmed

Unsec. Str. Bonds No.39 Issue Date Maturity Date Issue Amount (mn) Nov 27, 2020 Nov 27, 2040 JPY 10,000 RATING: A, Affirmed

Commercial Paper ISSUE LIMIT (mn): JPY 170,000 SUPPORT: Unsecured RATING: a-1, 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.