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December 14, 2007 |
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NIS GROUP: Alliance with TPG Cues R&I to Remove BB Rating Rating and Investment Information, Inc., has removed its BB issuer rating on NIS Group Co., Ltd. With a stable outlook. NIS Group Co., Ltd. announced on December 10, that it has agreed on a strategic capital and business alliance with TPG, the leading private equity investment firm in the US. NIS will raise approximately JPY20 billion by issuing new shares through third party allotment to a fund managed by the investment firm and stock warrants. The contribution of TPG in NIS will increase to a maximum of 40% after the deal. The holding company of Nissin Leasing (China) Co., Ltd., the consolidated subsidiary of NIS Group, will also conduct a capital increase through third party allotment to TPG for approximately US$102.5 million (JPY11.3 billion). TPG's contribution in Nissin Leasing (China) is expected to be 50%. NIS and Nissin Leasing (China) will accept majority of their management directors from TPG. Furthermore, NIS will conclude an advisory agreement with TPG and TPG will offer advisory services to NIS on planning and in pursuing medium- longterm corporate and financial strategy. TPG will extend a total of JPY10 billion bridge loan until it makes the contribution to NIS Group. On November 15 when NIS announced its intention of the strategic alliance, R&I remained NIS on the Rating Monitor, and has changed to "direction uncertain" from "with a view to downgrading." The agreement has assured capital increase from TPG, enhanced the group's financial base and reduced anxieties over interim cash management. Considering that further downward pressure on creditworthiness will be eased considerably, R&I has affirmed the Issuer Rating and Issue Ratings at BB, and removed them from the Rating Monitor. The Rating Outlook is Stable. NIS Group's creditworthiness will depend largely on whether it can halt worsening of its business base from the capital and business alliance with TPG and rebuild its funding base. R&I will carefully follow the developments and will reflect them on rating. About NIS Group Headquartered in Ehime Prefecture, Japan, NIS Group Co., Ltd., formerly Nissin Co., Ltd., -- http://www.nisgroup.jp/japanese/ind... -- is mainly engaged in the provision of secured and unsecured loans to individuals, including small business owners, consumers, small- and medium- sized enterprises in Japan. The Company operates in four business segments. The Integrated Loan Services segment is engaged in the provision of secured and unsecured loans, trust assurance, leasing and securities services to individuals and corporate clients. The Debt Management and Collection segment is engaged in the purchase, management and collection of debts. The Real Estate segment is engaged in the purchase, sale and development of real estate, as well as the asset management business. The Others segment is engaged in the provision of construction services and enterprise support services, among others. The Company has 54 subsidiaries and 10 associated companies. |
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