Banking credit agency Fitch IBCA has responded immediately to the Japanese Government's bailout of the Long-Term Credit Bank of Japan (LTCB), raising its short-term credit rating to F1 from F2.
The move came in recognition of Friday's announcement in Tokyo that financial authorities had temporarily nationalised the bank after pouring in three trillion yen (about HK$196 billion) in loans.
'On the basis of these developments, Fitch IBCA's upgrade . . . reflects the legally reinforced commitment of the Japanese authorities to ensure the bank meets its obligations in a timely manner,' Fitch said.
It said LTCB's long-term rating of BBB-plus - which signifies the possibility of a ratings alert - remained in place until the government's intentions were further clarified.
Moody's Investors Service also announced that it had put LTCB on review for possible upgrade, pending the release of further details of the government's plans for nationalisation and the satisfaction of creditors claims.
Moody's will also seek further clarification of the status of the bank's subordinated debt-holders under the rationalisation plans.