NEWS RELEASE

NEWS RELEASE
Oct 01, 2015
R&I Affirms A-/a-1, Stable: Rakuten, Inc., Rakuten Card Co., Ltd.
R&I Affirms A-, Stable: Rakuten Securities, Inc.
Rating and Investment Information, Inc. (R&I) has announced the following:
ISSUER:
Rakuten, Inc.
Issuer Rating: A-, Affirmed
Rating Outlook: Stable
Commercial Paper: a-1, Affirmed
ISSUER:
Rakuten Card Co., Ltd.
Issuer Rating: A-, Affirmed
Rating Outlook: Stable
Commercial Paper: a-1, Affirmed
ISSUER:
Rakuten Securities, Inc.
Issuer Rating: A-, Affirmed
Rating Outlook: Stable
RATIONALE:
Rakuten, Inc.
Rakuten, Inc. is the core company of the Rakuten Group, which provides a wide array of
e-commerce (EC) services. The company operates Japan's largest online mall called Rakuten Ichiba
and manages group companies. The earnings bases of Rakuten Ichiba and Rakuten Travel are solid.
These businesses are enjoying high profit margins and sustainable growth. The financial business has
also continued to achieve profit growth on the back of the expanded customer base of the Group's
credit card company, robust stock trading and life insurance business becoming a subsidiary. There
are overseas subsidiaries that are yet to make profit contributions, because many of them have just
recently joined the Group. Meanwhile, the profitability of the online shopping mall business in
developed countries is improving in tandem with progress in the conversion of the business model.
The company's operating cash flow will likely remain on an upward trend.
In June 2015, R&I upgraded the rating for Rakuten from BBB+ to A-, following the company's
announcement that it will increase capital and improve financials by using most of the proceeds of
about 180 billion yen for debt repayment. R&I's evaluation of the Rakuten Group's creditworthiness
factors in investment risk and the risk of impairment of shareholdings to a certain extent, as well as
capital accumulation through profits. R&I will keep an eye on investment trends at the company and
their impact on financials.
Rakuten Card Co., Ltd.
Rakuten Card Co., Ltd., a wholly-owned subsidiary of Rakuten, Inc., operates credit card
business and provides guarantees for personal card loans extended by Rakuten Bank, Ltd. Rakuten
Card is responsible for the Rakuten Group's financial settlement and contributes to user loyalty. Its
importance is high in the Group. The rating for Rakuten Card is thus on par with that for the Group's
core company Rakuten.
In the credit card business, efforts for customer acquisition are going well, leading to a steady
increase in the number of Rakuten Card members and the transaction volume. Rakuten Card is rapidly
catching up with major card companies in terms of transaction volume. On the other hand, customer
acquisition costs have risen because of its focus on increasing card members. For this reason,
■Contact
: Investors Service Division
TEL. +81-(0)3-3276-3511 E-mail. [email protected]
■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-3276-3438
Rating and Investment Information, Inc.
Nihonbashi 1-chome Mitsui Bldg., 1-4-1, Nihonbashi, Chuo-ku, Tokyo 103-0027, Japan http://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 http://www.r-i.co.jp/eng/policy/policy.html.
©Rating and Investment Information, Inc.
NEWS RELEASE
improvement in the risk resilience is moderate. While the earning capacity and risk resilience of
Rakuten Card are not sufficient for the A rating category, asset quality is maintained. Funding sources
for liquidity are stable, thanks mainly to a financing scheme centered on Rakuten Bank.
Rakuten Securities, Inc.
Rakuten Securities, Inc. is a wholly-owned subsidiary of Rakuten, Inc. and a leading on-line
securities broker. The company plays a part in the Rakuten Group, which provides various financial
services. While the securities business has yet to be considered crucial for the Group, the Group has
high expectations for the business to create synergy effects. The company is strategically important for
the Group. The rating for Rakuten Securities is therefore on par with that for the Group's core company
Rakuten.
Rakuten Securities' brokerage commission rate is among the lowest in the industry. Its great
advantage lies in the ability to acquire customers at a low cost by capitalizing on the Rakuten Group's
name recognition as well as Rakuten Ichiba's ability to attract customers through marketing campaigns
such as special promotions offering bonus points. The number of accounts is growing steadily. "Money
Bridge", a service which links Rakuten Securities and Rakuten Bank accounts, is helping the Group
achieve higher user loyalty. Besides commission income from stock trading, Rakuten Securities has
seen gradual growth in earnings from FX (foreign exchange) margin trading and investment
trust-related operations. Because the cost structure is also sound, the company will likely maintain
earnings resilience commensurate with the rating for the foreseeable future. The level of risk resilience
is comfortable for the rating.
The primary rating methodologies applied to this rating are provided at "R&I's Basic Methodology
for Corporate Credit Ratings", "Shared Rating Approach for Financial Institutions, etc.", "Credit Card
and Credit Sales", "Securities Firms", "Depository Financial Institutions" 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.
http://www.r-i.co.jp/eng/cfp/about/methodology/index.html
R&I RATINGS:
ISSUER:
RATING:
RATING OUTLOOK:
Rakuten, Inc. (Sec. Code: 4755)
Issuer Rating
A-, Affirmed
Stable
ISSUE LIMIT (mn):
SUPPORT:
RATING:
Commercial Paper
JPY 80,000
Unsecured
a-1, Affirmed
ISSUER:
RATING:
RATING OUTLOOK:
Rakuten Card Co., Ltd.
Issuer Rating
A-, Affirmed
Stable
■Contact
: Investors Service Division
TEL. +81-(0)3-3276-3511 E-mail. [email protected]
■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-3276-3438
Rating and Investment Information, Inc.
Nihonbashi 1-chome Mitsui Bldg., 1-4-1, Nihonbashi, Chuo-ku, Tokyo 103-0027, Japan http://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 http://www.r-i.co.jp/eng/policy/policy.html.
©Rating and Investment Information, Inc.
NEWS RELEASE
ISSUE LIMIT (mn):
SUPPORT:
RATING:
ISSUER:
RATING:
RATING OUTLOOK:
Commercial Paper
JPY 75,000
Unsecured
a-1, Affirmed
Rakuten Securities, Inc.
Issuer Rating
A-, Affirmed
Stable
■Contact
: Investors Service Division
TEL. +81-(0)3-3276-3511 E-mail. [email protected]
■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-3276-3438
Rating and Investment Information, Inc.
Nihonbashi 1-chome Mitsui Bldg., 1-4-1, Nihonbashi, Chuo-ku, Tokyo 103-0027, Japan http://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 http://www.r-i.co.jp/eng/policy/policy.html.
©Rating and Investment Information, Inc.