NEWS RELEASE

Jan 04, 2021

R&I Credit Rating Changes for 2020

Rating and Investment Information, Inc. (R&I) has compiled a summary of credit rating changes for 2020. The summary encompasses Issuer Ratings or Insurance Claims Paying Abilities of domestic and foreign issuers. There were 36 upgrades and 10 downgrades for domestic corporations, 4 upgrades for government agencies, 2 upgrades for investment corporations, 3 upgrades and 1 downgrade for foreign corporations and 5 upgrades and 3 downgrades for sovereigns. No rating changes were made for local governments. For domestic issuers, the total number of upgrades was 42, exceeding that of downgrades (which was 10). Upgrades of domestic issuers have outnumbered downgrades for 8 consecutive years. That said, nearly 40% of the upgrades occurred in January and February. Since the novel coronavirus pandemic intensified in March, the number of upgrades has decreased. Moreover, many of the upgraded issuers were domestic demand-focused companies that are less susceptible to economic fluctuations. As regards Rating Outlooks, 16 Stable Outlooks were changed to Negative Outlooks, whereas 12 Stable Outlooks were changed to Positive Outlooks. This suggests that the pandemic has exerted growing downward pressure on ratings for issuers.

Domestic Foreign Upgrade Downgrade Upgrade Downgrade Corporations 36 10 3 1 Government Agencies 4 0 0 0 Local Governments 0 0 0 0 Sovereigns 0 0 5 3 Investment Corporations 2 0 0 0 Total 42 10 8 4

[Domestic Corporations] In the manufacturing sector, there were 15 upgrades for 15 issuers and 7 downgrades for 7 issuers. Compared to 2019, which saw 16 upgrades for 16 issuers and 5 downgrades for 5 issuers, the number of upgrades decreased and the number of downgrades increased. In January, Motor Corp. was upgraded to AAA in light of its solidified earnings base. The company's return to the highest possible rating is the first time in 8 years since 2012. At the same time, R&I upgraded Daihatsu Motor Co., Ltd., a wholly-owned subsidiary of Toyota Motor. The electric appliance industry saw the largest number of upgrades, including Corp., Azbil Corp., Taiyo Yuden Co., Ltd. and Co., Ltd. In the pharmaceutical industry, & Co., Ltd. and Co., Ltd. were upgraded due to their increased product competitiveness. The upgrade of Inc. reflected the effective use of characters and other contents (intellectual property). R&I downgraded Motor Co., Ltd., KYB Corp., Co., Ltd., Ltd. and NTN Corp. because their earning capacities stagnated and their financial bases were adversely affected by impairment losses and structural reform costs, for instance. The downgrades of Mitsubishi Tanabe Pharma Corp. and Chemical Co., Ltd. (currently Materials Co., Ltd.) reflected changes in their management structures. The former became a wholly-owned subsidiary of its parent company, and the latter was acquired by another company.

■Contact : Sales and Marketing Division, Customer Service Dept. TEL. +81-(0)3-6273-7471 E-mail. [email protected] ■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-6273-7273 Rating and Investment Information, Inc. TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, 101-0054, https://www.r-i.co.jp Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are not statements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment. R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details, please refer to https://www.r-i.co.jp/en/docs/policy/site.html. ©Rating and Investment Information, Inc.

NEWS RELEASE

In the non-manufacturing sector, there were 11 upgrades for 11 issuers and 1 downgrade for 1 issuer, both of which were the same as those in 2019 (11 upgrades for 11 issuers and 1 downgrade for 1 issuer). The upgrades of Fukuyama Transporting Co., Ltd., The Shibusawa Warehouse Co., Ltd. and Senko Group Holdings Co., Ltd. reflected the enhanced earning capacities of their core logistics operations. Daiseki Co., Ltd., a leading industrial waste disposal company, was also upgraded because the company reinforced its earnings base on the back of its unique business model. Meanwhile, Aoyama Trading Co., Ltd., a major business wear company, was downgraded. Amid uncertainty over stabilization of store sales, its efforts to promote price transparency and digitalization have yet to deliver sufficient results, and the financial balance deteriorated as a result of acquisitions in the past and aggressive shareholder returns.

In the financial sector, there were 9 upgrades for 9 issuers and 2 downgrades for 2 issuers. Compared to 13 upgrades for 12 issuers and 5 downgrades for 5 issuers in 2019, both the number of upgrades and the number of downgrades decreased. R&I upgraded ORIX Corp., which enhanced its earnings base and risk resilience, and its subsidiaries ORIX Bank Corp. and ORIX Life Insurance Corp. The upgrade of Toyota Finance Corp. and the downgrade of Nissan Financial Services Co., Ltd. resulted from rating changes for their parent companies. The upgrade of Pocket Card Co., Ltd. reflected an expectation that Corp.'s successful tender offer for the shares of FamilyMart Co., Ltd. would accelerate integrated credit card business development with the two companies. Given the increased financial leverage stemming from share buybacks and investments in subsidiaries, R&I downgraded Monex Group, Inc. based on the structural subordination of a holding company, among others. On the other hand, it affirmed the rating for Monex, Inc., the core company of the group, at BBB.

R&I upgraded Fukuoka Institute of Technology, judging that its rank among universities in the Kyushu region was rising and it would be able to maintain and improve its ability to attract students over the medium to long term.

[Government Agencies] R&I upgraded Urban Renaissance Agency, Japan Railway Construction, Transport and Technology Agency, Development Bank of Japan Inc. and Welfare and Medical Service Agency by incorporating into the ratings their heightened importance to the government's policies in their respective areas of operations.

[Foreign Corporations] The 3 upgraded foreign corporations were all financial institutions. The upgrades of CITIC Group Corp. and Bank of Ltd. followed the upgrade of the Foreign Currency Issuer Rating for China in December 2019. Credit Suisse Group AG was upgraded, as the Wealth Management business was strengthened and profitability became more stable. Scandinavian Airlines System was downgraded. In the wake of the COVID-19 outbreak, its profits and cash flow were strongly squeezed and financial leeway was lost.

[Sovereigns] R&I upgraded countries such as , Republic of the and Republic of Indonesia by end-March. In June and afterwards, it downgraded Republic of South Africa, Republic of Tunisia and Central Bank of Tunisia, whose fiscal positions were severely affected by the coronavirus pandemic.

■Contact : Sales and Marketing Division, Customer Service Dept. TEL. +81-(0)3-6273-7471 E-mail. [email protected] ■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-6273-7273 Rating and Investment Information, Inc. TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are not statements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment. R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details, please refer to https://www.r-i.co.jp/en/docs/policy/site.html. ©Rating and Investment Information, Inc.

NEWS RELEASE

[Investment Corporations] R&I upgraded Nomura Real Estate Master Fund, Inc., which enhanced the quality of its portfolio, and Japan Rental Housing Investments Inc. (currently Daiwa Securities Living Investment Corp.), which was expected to expand its asset size and improve asset quality due primarily to a merger.

■Contact : Sales and Marketing Division, Customer Service Dept. TEL. +81-(0)3-6273-7471 E-mail. [email protected] ■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-6273-7273 Rating and Investment Information, Inc. TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are not statements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment. R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details, please refer to https://www.r-i.co.jp/en/docs/policy/site.html. ©Rating and Investment Information, Inc.

NEWS RELEASE

Number of Credit Rating Changes during 2020 by Industry Sector Domestic Foreign Upgrade Downgrade Upgrade Downgrade Manufacturers (Total) 15 7 0 0 Foods 1 Textiles & Apparels Pulp & Paper 1 Chemicals 1 1 Pharmaceutical 2 1 Oil & Coal Products Glass & Ceramics Products 1 Iron & Steel Nonferrous Metals 1 Metal Products Machinery 1 Electric Appliances 4 Transportation Equipment 2 2 Precision Instruments 2 Other Manufacturing 2

Non-manufacturers (Total) 11 1 0 1 Construction 1 Land Transportation 2 Marine Transportation Air Transportation 1 Information & Communication 1 Warehousing & Harbor Transportation Services 1 Wholesale Trade 2 Retail Trade 1 Real Estate 1 Services 3 Electric Power & Gas

Financial Institutions (Total) 9 2 3 0 Banks 2 3 Securities & Commodity Futures 1 1 Insurance 1 Other Financing Business 5 1

School Corporations 1 0 0 0 Government Agencies 4 0 0 0 Local Governments 0 0 0 0 Sovereigns 0 0 5 3 Investment Corporations 2 0 0 0

■Contact : Sales and Marketing Division, Customer Service Dept. TEL. +81-(0)3-6273-7471 E-mail. [email protected] ■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-6273-7273 Rating and Investment Information, Inc. TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are not statements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment. R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details, please refer to https://www.r-i.co.jp/en/docs/policy/site.html. ©Rating and Investment Information, Inc.

NEWS RELEASE

Number of Credit Rating Changes for Domestic Issuers (Quarterly) Jan-Mar Apr-Jun Jul-Sep Oct-Dec Year Upgrade Downgrade Upgrade Downgrade Upgrade Downgrade Upgrade Downgrade 2016 7 5 6 10 4 1 14 5 2017 7 7 5 1 13 2 5 1 2018 13 3 15 1 26 0 17 3 2019 13 5 6 2 13 2 19 2 2020 18 2 5 4 7 2 12 2

Number of Credit Rating Changes for Domestic Issuers during 2016-2020 2016 2017 2018 2019 2020 Manufacturers Upgrade 9 11 33 16 15 Downgrade 9 8 2 5 7 Non-manufacturers Upgrade 12 7 29 11 11 Downgrade 6 2 2 1 1 Financial Institutions Upgrade 6 12 6 13 9 Downgrade 6 1 2 5 2 School Corporations Upgrade 1 0 0 0 1 Downgrade 0 0 0 0 0 Government Agencies Upgrade 0 0 1 7 4 Downgrade 0 0 0 0 0 Local Governments Upgrade 0 0 0 1 0 Downgrade 0 0 0 0 0 Investment Corporations Upgrade 3 0 2 3 2 Downgrade 0 0 1 0 0 Total Upgrade 31 30 71 51 42 Downgrade 21 11 7 11 10

Note 1: "Number of Credit Rating Changes for Domestic Issuers" is based on Issuer Ratings or Insurance Claims Paying Abilities of domestic corporations, government agencies, local governments and investment corporations. Note 2: When an issuer was upgraded or downgraded twice or more during the calculation period, all changes have been counted. Note 3: For sovereigns, credit rating changes for only Foreign Currency Issuer Ratings have been counted.

■Contact : Sales and Marketing Division, Customer Service Dept. TEL. +81-(0)3-6273-7471 E-mail. [email protected] ■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-6273-7273 Rating and Investment Information, Inc. TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are not statements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment. R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details, please refer to https://www.r-i.co.jp/en/docs/policy/site.html. ©Rating and Investment Information, Inc.

NEWS RELEASE

List of Issuers Upgraded or Downgraded Upgrade Date Sec. Code Issuer R&I Rating From To Jan 10 8358 Suruga Bank Ltd. BBB- BBB Jan 17 - Fukuoka Institute of Technology A A+ Jan 22 7203 Toyota Motor Corp. AA+ AAA Jan 22 - Daihatsu Motor Co., Ltd. AA- AA Jan 22 - Toyota Finance Corp. AA+ AAA Jan 24 8739 SPARX Group Co., Ltd. BBB BBB+ Jan 27 6976 Taiyo Yuden Co., Ltd. A- A Jan 29 6703 Oki Electric Industry Co., Ltd. BBB- BBB Feb 03 - Nittsu Shoji Co., Ltd. A- A+ Feb 06 8591 ORIX Corp. A+ AA- Feb 06 - ORIX Bank Corp. A+ AA- Feb 06 - ORIX Life Insurance Corp. A+ AA- Feb 28 3861 Oji Holdings Corp. A A+ Mar 11 1808 Haseko Corp. A- A Mar 19 8830 Sumitomo Realty & Development Co., Ltd. A A+ Apr 20 9304 The Shibusawa Warehouse Co., Ltd. BBB+ A- May 22 4507 Shionogi & Co., Ltd. A+ AA- Jun 26 4523 Eisai Co., Ltd. A+ AA- Jul 16 9678 Kanamoto Co., Ltd. BBB+ A- Jul 28 7734 Riken Keiki Co., Ltd. BBB+ A- Aug 11 7832 Bandai Namco Holdings Inc. A A+ Sep 10 - Pocket Card Co., Ltd. BBB+ A- Sep 25 2809 Kewpie Corp. A A+ Sep 28 2331 Sohgo Security Services Co., Ltd. A A+ Sep 28 9075 Fukuyama Transporting Co., Ltd. A- A Oct 13 8793 NEC Capital Solutions Ltd. BBB+ A- Oct 16 6845 Azbil Corp. A A+ Oct 20 7821 Maeda Kosen Co., Ltd. BBB BBB+ Oct 22 6758 Sony Corp. A A+ Oct 30 8424 Fuyo General Lease Co., Ltd. A- A Nov 17 9069 Senko Group Holdings Co., Ltd. BBB+ A- Nov 26 8020 Kanematsu Corp. BBB BBB+ Dec 10 9793 Daiseki Co., Ltd. BBB+ A- Dec 16 7988 Nifco Inc. A A+ Dec 22 7979 Shofu Inc. BBB BBB+ Dec 22 9697 Capcom Co., Ltd. BBB+ A-

■Contact : Sales and Marketing Division, Customer Service Dept. TEL. +81-(0)3-6273-7471 E-mail. [email protected] ■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-6273-7273 Rating and Investment Information, Inc. TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are not statements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment. R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details, please refer to https://www.r-i.co.jp/en/docs/policy/site.html. ©Rating and Investment Information, Inc.

NEWS RELEASE

Downgrade Date Sec. Code Issuer R&I Rating From To Jan 08 - Mitsubishi Tanabe Pharma Corp. (A+) A Mar 13 8219 Aoyama Trading Co., Ltd. A A- May 28 7242 KYB Corp. BBB+ BBB Jun 02 - Hitachi Chemical Co., Ltd. (A+) BBB+ Jun 04 7201 Nissan Motor Co., Ltd. A+ A Jun 04 - Nissan Financial Services Co., Ltd. A+ A Aug 11 5202 Nippon Sheet Glass Co., Ltd. BB+ BB Aug 25 5803 Fujikura Ltd. A A- Oct 21 8698 Monex Group, Inc. BBB BBB- Dec 22 6472 NTN Corp. A- BBB+

Upgrade Date Sec. Code Issuer R&I Rating From To Jan 31 - Urban Renaissance Agency AA AA+ Apr 17 - Japan Railway Construction, Transport and Technology Agency AA AA+ May 21 - Development Bank of Japan Inc. AA AA+ Nov 27 - Welfare and Medical Service Agency AA AA+

Upgrade Date Sec. Code Issuer R&I Rating From To Jan 17 - CITIC Group Corp. BBB+ A- Jan 17 - Bank of China Ltd. A A+ Dec 03 - Credit Suisse Group AG A A+

Downgrade Date Sec. Code Issuer R&I Rating From To Jun 19 - Scandinavian Airlines System (B+) (CCC+)

Upgrade Date Sec. Code Issuer R&I Rating From To Jan 29 - Malaysia A A+ Feb 07 - Republic of the Philippines BBB BBB+ Mar 09 - Slovak Republic A A+ Mar 17 - Republic of Indonesia BBB BBB+ Sep 03 - Ukraine B B+

■Contact : Sales and Marketing Division, Customer Service Dept. TEL. +81-(0)3-6273-7471 E-mail. [email protected] ■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-6273-7273 Rating and Investment Information, Inc. TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are not statements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment. R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details, please refer to https://www.r-i.co.jp/en/docs/policy/site.html. ©Rating and Investment Information, Inc.

NEWS RELEASE

Downgrade Date Sec. Code Issuer R&I Rating From To Jun 05 - Republic of South Africa BBB BBB- Jul 22 - Republic of Tunisia BB BB- Jul 22 - Central Bank of Tunisia BB BB-

* For sovereigns, credit rating changes for only Foreign Currency Issuer Ratings have been counted.

Upgrade Date Sec. Code Issuer R&I Rating From To Jan 22 3462 Nomura Real Estate Master Fund, Inc. A+ AA- Mar 04 8986 Japan Rental Housing Investments Inc. (A) A+

■Contact : Sales and Marketing Division, Customer Service Dept. TEL. +81-(0)3-6273-7471 E-mail. [email protected] ■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-6273-7273 Rating and Investment Information, Inc. TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are not statements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment. R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details, please refer to https://www.r-i.co.jp/en/docs/policy/site.html. ©Rating and Investment Information, Inc.