Fitch lifts Daiwa Securities

Fitch Ratings said it upgraded the long-term issuer default ratings of Daiwa Securities Group Inc. and wholly owned subsidiary, Daiwa Securities Co. Ltd., to A- from BBB+.

Fitch also said it affirmed the long-term issuer default ratings of Nomura Holdings, Inc. and wholly owned subsidiaries, Nomura Securities Co., Ltd. and Nomura Financial Products & Services, Inc., at A-.

The outlook on all of the entities is stable.

The upgraded ratings include Daiwa Securities Group’s long-term foreign- and local-currency issuer default ratings to A- from BBB+ and short-term foreign- and local-currency issuer default ratings to F1 from F2. Its viability rating was affirmed at BBB+.

The long-term foreign- and local-currency issuer default ratings on Daiwa Securities also was upgraded to A- from BBB+, along with its short-term foreign- and local-currency issuer default rating to F1 from F2 and its senior debt to A- from BBB+. Its viability rating was affirmed at BBB+.

The upgrades reflect a reassessment of the role Daiwa plays in Japan’s financial markets as the second-largest securities firm, Fitch said.

The agency said it believes the Japanese authorities would not distinguish between the two largest securities firms in terms of systemic importance – either of their failures would significantly impact the financial system.

Fitch also said it believes that Daiwa is likely to be designated by Japanese authorities as a domestic systemically important financial institution and likely to receive financial support, if required, by law.

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