22-D-1478
March 3, 2023

Japan Credit Rating Agency, Ltd. (JCR) announces the following credit rating.

Kanagawa Prefectural Housing Supply Corporation (security code: -)<Affirmation>
Long-term Issuer Rating:
Outlook:Bonds:

AA+
StableAA+

Rationale(1) Kanagawa Prefectural Housing Supply Corporation (“KJK”) is a special corporation established by
Kanagawa Prefecture under the Local Housing Corporation Act. Ranking third in asset size among
the nation’s local housing corporations in its core rental housing management business, KJK supports
housing stability for the elderly and low income earners by supplying public rental housing and thus
serves as a housing safety net. It shows strong presence as a key player in the Prefecture’s housing
policy by, for instance, rebuilding housing complexes through the development of complex facilities
with housing for the elderly, child care support services, etc. and revitalizing housing complex
communities in cooperation with universities for some of the large-scale ones.
(2) The ratings reflect the Prefecture’s creditworthiness as a founder, along with other factors including
KJK’s clear role in the Prefecture’s housing policy, decent business size and relatively favorable
financial base. The Kanagawa Prefecture Basic Plan for Housing, which was revised in March 2022,
reiterates KJK’s roles including supplying good housing to those to whom special attention should be
paid to secure housing and rebuilding the housing complex communities. While KJK does not receive
interest subsidies nor loss compensation from the Prefecture, indicating its financially independent
business operation, it is socially highly significant as the core entity for the Prefecture’s housing policy.
Therefore, JCR assumes that the Prefecture will remain strongly involved in KJK’s business
management.
(3) Occupancy rates of KJK’s mainstay general rental housing (excluding residences not available forrent) are high at over 90%, earnings are stable and ordinary income steadily tops 2 billion yen.
Looking ahead, as KJK intends to revitalize and remodel aged housing complexes throughreconstruction and the extension of building life cycle, the consequent increase in maintenance andrepair expenses is expected to push down the profit level. That said, occupancy rates will likely remainhigh as the asset value will be maintained and even improved. Given also that the reconstruction of
the highly marketable housing complexes in Yokohama and Kawasaki areas is expected to help
gradually increase rent income, there are no particular concerns about KJK securing certain profits.
Although maintenance and repair expenses are feared to swell more than expected as raw material
prices and unit labor costs are tending to rise, JCR considers that KJK can appropriately control
expenses by flexibly revising repair plans in such an event.
(4) KJK’s financial structure is at a favorable level compared to that of other major housing supply
corporations, as shown by equity ratio of 33% and debt-equity ratio of 1.5x as of March 31, 2022.
KJK has reasonably high risk tolerance, given, among others, that it has been recording sufficient
provisions in preparation for repair works to be carried out as planned and remodeling of rental
housing assets. As regards the reconstruction of housing complexes, KJK is systematically pressing
ahead with the project so as not to require a large amount of financing at one time. The number ofcandidate housing complexes subject to the medium-to-long-term project is only around 10, and KJK
intends to appropriately control interest-bearing debt at a certain level. Therefore, JCR assumes that
financial soundness will be maintained.
Akira Minamisawa, Kei Aoki

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Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

Rating
Issuer: Kanagawa Prefectural Housing Supply Corporation<Affirmation>
Long-term Issuer Rating: AA+
Issue
Amount (bn)Bonds no. 2
JPY 10Bonds no. 3
JPY 17
Bonds no. 4
JPY 10Bonds no. 5
JPY 7
Bonds no. 6
JPY 4
Bonds no. 7
JPY 5
Bonds no. 8
JPY 4
Bonds no. 9
JPY 6
Bonds no. 10
JPY 3
Bonds no. 11
JPY 3

Outlook: Stable
Issue Date
Dec. 21, 2015
Apr. 26, 2016
Apr. 24, 2018
Apr. 24, 2018
Apr. 23, 2019
Apr. 23, 2019
Apr. 23, 2020
Apr. 23, 2020
Apr. 20, 2021
Apr. 26, 2022

Due Date
Dec. 19, 2025
Apr. 24, 2026
Apr. 24, 2028
Apr. 23, 2038
Apr. 23, 2029
Apr. 22, 2039
Apr. 23, 2030
Apr. 23, 2040
Apr. 19, 2041
Apr. 25, 2042

Coupon0.679%
0.320%
0.325%
0.709%
0.215%
0.534%
0.260%
0.489%
0.591%
0.838%

Rating
AA+
AA+
AA+
AA+
AA+
AA+
AA+
AA+
AA+
AA+

Rating Assignment Date: February 28, 2023
The assumptions for the credit ratings and the definitions of the rating symbols are published as "Types of Credit Ratings and Definitionsof Rating Symbols" (January 6, 2014) in Information about JCR Ratings on JCR's website (https://www.jcr.co.jp/en/).
Outline of the rating methodology is shown as "FILP Agencies, etc." (May 29, 2020) in Information about JCR Ratings on JCR's
website (https://www.jcr.co.jp/en/).
The rating stakeholder participated in the rating process of the aforementioned credit ratings.

Japan Credit Rating Agency, Ltd.
Jiji Press Building, 5-15-8 Ginza, Chuo-ku, Tokyo 104-0061, Japan
Tel. +81 3 3544 7013, Fax. +81 3 3544 7026
Information herein has been obtained by JCR from the issuers and other sources believed to be accurate and reliable. However, because of the possibility of human or mechanical error as well as other factors,
JCR makes no representation or warranty, express or implied, as to accuracy, results, adequacy, timeliness, completeness or merchantability, or fitness for any particular purpose, with respect to any suchinformation, and is not responsible for any errors or omissions, or for results obtained from the use of such information. Under no circumstances will JCR be liable for any special, indirect, incidental orconsequential damages of any kind caused by the use of any such information, including but not limited to, lost opportunity or lost money, whether in contract, tort, strict liability or otherwise, and whether
such damages are foreseeable or unforeseeable. JCR's ratings and credit assessments are statements of JCR's current and comprehensive opinion regarding redemption possibility, etc. of financial obligations
assumed by the issuers or financial products, and not statements of opinion regarding any risk other than credit risk, such as market liquidity risk or price fluctuation risk. JCR's ratings and credit assessments
are statements of opinion, and not statements of fact as to credit risk decisions or recommendations regarding decisions to purchase, sell or hold any securities such as individual bonds or commercial paper.
The ratings and credit assessments may be changed, suspended or withdrawn as a result of changes in or unavailability of information as well as other factors. JCR receives a rating fee paid by issuers for
conducting rating services in principle. JCR retains all rights pertaining to this document, including JCR's rating data. Any reproduction, adaptation, alteration, etc. of this document, including such rating
data, is prohibited, whether or not wholly or partly, without prior consent of JCR.
JCR is registered as a "Nationally Recognized Statistical Rating Organization" with the U.S. Securities and Exchange Commission with respect to the following four classes. (1) Financial institutions, brokers
and dealers, (2) Insurance Companies, (3) Corporate Issuers, (4) Issuers of government securities, municipal securities and foreign government securities.
JCR publishes its press releases regarding the rating actions both in Japanese and in English on the same day. In case that it takes time to translate rating rationale, JCR may publicize the summary version,
which will be replaced by the full translated version within three business days. (Regarding Structured Finance products, JCR only publicize the summary version in English.)

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Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

I n f o r m at i o n D i s c l o s u r e F o r mJapan Credit Rating Agency, Ltd.

Disclosure Required by Paragraph (a)(1)(ii) of Rule 17g-7

1

Issuer:Kanagawa Prefectural Housing Supply Corporation

Rating Publication
Date:

March 3, 2023

The Symbol, Number, or Score in the Rating Scale used to Denote Credit Rating Categories andNotches and, the Identity of the Obligor or the Identity and a Description of the Security or Money
Market Instrument as Required by Paragraph (a)(1)(ii)(A) of Rule 17g-7
Please see the news release. If the credit rating is a private rating, please see the report for private
rating.

2

The version of the procedure or methodology used to determine the credit rating; as Required by
Paragraph (a)(1)(ii)(B) of Rule 17g-7
Please see the news release. If the credit rating is a private rating, please see the report for private
rating.

3

The Main Assumptions and Principles used in Constructing the Procedures and Methodologies used
to Determine the Credit Rating as Required by Paragraph (a)(1)(ii)(C) of Rule 17g-7
The credit rating methodology assumes, in principle, to be applied to assess the likelihood of a given
debt payment in light of its issuer’s condition and business environment, etc. in the relevant future.
There is certain limitation, however, in the time horizon that the rating foresees.
The credit rating methodology assumes, in principle, that the factors posted in the below areparticularly important for such likelihood to be determined, and that the rating determination is madeby evaluating each of them not only quantitatively but also employing qualitative analyses.

A) Legal Protection and Support Provided by the Government
The likelihood of a given debt payment is highly conditional to the issuer’s legal protection provided by
the government, personnel and capital relationship with the government, importance in thegovernment’s policy, credit enhancement, and other forms of the government’s supporting policy,
framework and the strength thereof.

B) Business Bases
The likelihood of a given debt payment is highly conditional to its issuer’s business bases - how they
can be maintained/ expanded into the future and thereby secure earnings and cash flows in adequacy
and in a sustainable way.

1/5C) Financial Grounds and Asset Quality
The likelihood of debt payment is highly dependent on the degree of the issuer’s indebtedness and loss
absorption capacity in terms of equity capital. Also notable is that a financial institution might see asignificant loss of financial grounds as a result of changes in value of the assets under its possession.
D) Liquidity Positions
The likelihood of debt payment is highly dependent on the adequacy of the issuer’s cash and othersources of repayment (liquidity positions).
E) Order of Seniority in Debt Payment
The likelihood of debt payment can be different between given debts of the same issuer. The likelihoodof debt payment for an individual debt is dependent on the issuer’s discretion, and/ or its rank relative
to other debts of the same issuer in the order of seniority in principal/ interest payment which isdetermined by design as financial product or by laws, etc.

4

The Potential Limitations of the Credit Rating as Required by Paragraph (a)(1)(ii)(D) of Rule 17g-7
The credit rating herewith presented by JCR is its summary opinion with regard to the likelihood ofgiven debt payment and hence not necessarily a perfect representation of such likelihood. The credit
rating is not intended to estimate the probability of default or the loss on given default, either.
The objective of the credit rating herewith presented does not include any concerns other than thelikelihood of debt payment, such as risks of price changes, market liquidity, etc.
The credit rating herewith presented is necessary to be reviewed along with possible changes of theissuer of rated objects in its business performance and/ or circumstances which include regulatoryenvironment, and hence subject to possible alteration.

5

Information on the Uncertainty of the Credit Rating as Required by Paragraph (a)(1)(ii)(E) of Rule
17g-7
The information used for the determination of credit rating as herewith presented is obtained by JCR
from the issuer of rated objects and other sources that JCR trusts in terms of accuracy and reliability
but possibly contains errors due to human, non-human or other causes. Consequently, the credit rating
determined on the grounds of such information does not constitute, explicitly or implicitly, any
representation or warrant of JCR on the information itself or any consequences of its use in terms ofaccuracy, relevance, timeliness, wholeness, market value, or usefulness for any specific purposes.

6

Use of Due Diligence Services of a Third Party in Taking the Rating Action as Required by Paragraph(a)(1)(ii)(F) of Rule 17g-7
There is no use of any third-party due diligence service in the determination of the credit ratingherewith presented.

7

Use of Servicer or Remittance Reports to Conduct Surveillance of the Credit Rating Required by
Paragraph (a)(1)(ii)(G) of Rule 17g-7
There is no use of any servicer or remittance report to conduct surveillance of the credit rating herewithpresented.

2/5

8

The Types of Data Relied Upon for the Purpose of Determining the Credit Rating as Required by
Paragraph (a)(1)(ii)(H) of Rule17g-7
The information posted in the below, which includes data, is used for the determination of the credit
rating herewith presented.
A) Audited financial statements presented by the rating stakeholders
B) Explanations of business performance, management plans, etc. presented by the rating stakeholders

9Overall assessment of the Quality of Information Available and Considered in Determining theCredit Rating as Required by Paragraph (a)(1)(ii)(l) of Rule 17g-7
JCR holds its basic policies for securing the quality of information as a base of due diligence for thedetermination of credit ratings. The information used as a base for the determination of credit ratingherewith presented satisfies such policies, which include the audit by an independent auditor, thepublication by the issuer, some independent media or, otherwise, JCR analyst’s scrutiny, etc.
JCR sees no particular weakness in the quality of information used for the determination of the credit
rating herewith presented as compared to the information used in other cases of the credit rating forcomparable issuers or ratable objects.
If the credit rating is an Indication, please see the report for Indication.

10 Information Relating to Conflicts of Interest as Required by Paragraph (a)(1)(ii)(J) of Rule 17g-7
JCR receives payment of compensation for the determination of the credit rating herewith presented
from either one of those parties who are issuer, underwriter, depositor or sponsor.
JCR did not receive in the last fiscal year in the past payment of compensation from the same party forany kind of JCR’s service other than the determination of public or private credit rating, such as one
in the ancillary business.

or Measure of the Potential Volatility of the Credit Rating as Required by Paragraph
11 Explanation(a)(1)(ii)(K) of Rule 17g-7
A) Legal Protection and Support Provided by the Government
The credit rating is subject to alteration if there is a change in the issuer’s legal support by thegovernment, personnel or capital relationship with the government, importance in the government’s
policy, credit enhancement and other forms of the government’s supporting policy, framework and thestrength thereof. The resultant alteration of the credit rating is usually by a notch, with possibility of afew notches if and when the change is large.
B) Business Bases
The credit rating is subject to alteration if there is improvement or deterioration of the issuer’s businessbases, since its revenue, etc. may improve or deteriorate by the change in its business management
policies, clients’ preferences, competitive situation, or a technological innovation. The resultant
alteration of the credit rating is usually by a notch, with possibility of a few notches if and when thechange in the business bases is large.
C) Financial Grounds and Asset Quality
The credit rating is subject to alteration if the issuer increases/ decreases its debt/ capital or vice versa
and thereby makes its individual debt payment liability less or more bearable and its loss absorption
capacity into the future decreased or increased. Also, the changes in the quality of asset under the

3/5

issuer’s holding may affect the credit rating, since such changes could raise or lower the likelihood of
future loss of the issuer’s financial grounds. The resultant alteration of the credit rating is usually by anotch, with possibility of a few notches if and when the change in the financial grounds and/ or asset
quality is large.

D) Liquidity Positions
The credit rating is subject to alteration if there is a change in the issuer’s financial management policy
or in the relations with fund procurement sources and the change thereby makes its liquidity positions
improve or deteriorate. The resultant alteration of the credit rating is usually by a notch, with possibilityof a few notches if and when the change is large.
E) Creditworthiness of the Government, etc. that Constitute the Framework of Credit Enhancement
The credit rating is subject to alteration if there is a change in the creditworthiness of the government,
etc. that constitute the framework of credit enhancement. The resultant alteration of the credit rating is
usually a notch, with possibility of a few notches if and when the change on such framework is
exceptionally large.
F) Various Events
The credit rating is subject to alteration on occurrence of various events, such as change in the issuer’s
major shareholders, M&A and other organizational change, accident, violation of the law, litigation,legal/ regulatory change, natural disaster, etc., which are unforeseeable at the time when the credit
rating is determined, causing a significant change on the issuer’s business bases, financial grounds, etc.
The resultant alteration of the credit rating could be by a notch but more often than not as much as afew notches.

12

Information on the Content of the Credit Rating, Including the Historical Performance of the Credit
Rating and the Expected Probability of Default and the Expected Loss in the Event of Default as
Required by Paragraph (a)(1)(ii)(L) of Rule 17g-7
Historical records of the credit rating herewith presented are posted in the end of this paper.
The credit rating herewith presented by JCR is its summary opinion with regard to the likelihood ofgiven debt payment and hence not necessarily a perfect representation of such likelihood. The credit
rating is not intended to estimate the probability of default or the loss on given default, either.
Facts of the probability of default are posted as Form NRSRO Exhibit 1 on the JCR website under the
URL:
https://www.jcr.co.jp/en/service/company/regu/nrsro/on the Sensitivity of the Credit Rating to Assumptions Made as Required by Paragraph
13 Information(a)(1)(ii)(M) of Rule 17g-7
A) Legal Protection and Government Support
The credit rating herewith presented could be changed if and when the assumptions made at the time ofits determination turn out to be inaccurate with regard to the issuer’s legal protection provided by thegovernment, personnel and capital relationship with the government, importance in the government’s
policy, credit enhancement and other forms of the government’s supporting policy, framework and thestrength thereof. The resultant change of the credit rating is most likely by one notch, as JCR stipulates,
but possibly as much as a few notches if the change in the government’s supporting policy issignificant.
B) Business Bases
The credit rating herewith presented could be changed if and when the assumptions made at the time ofits determination turn out to be inaccurate with regard to the issuer’s business bases and powers ofearning or cash flow generation, etc. The resultant change of the credit rating is most likely by a notch,
as JCR speculates, but possibly as much as a few notches if the development is rapid in improvement or
deterioration of the issuer’s business bases on some drastic change in the operational environments, etc.
C) Financial Grounds and Asset Quality
The credit rating herewith presented could be changed if and when the assumptions made at the time ofits determination turn out to be inaccurate with regard to the issuer’s financial grounds and asset
4/5

quality. The resultant change of the credit rating is most likely by a notch, as JCR speculates, but
possibly as much as a few notches if the development is rapid in improvement or deterioration of theissuer’s financial grounds and/ or asset quality on some drastic change in its business bases.

D) Liquidity Risks
The credit rating herewith presented could be changed if and when the assumptions made at the time ofits determination turn out to be inaccurate with regard to the issuer’s liquidity positions. The resultant
change of the credit rating is most likely by a notch, as JCR speculates, but possibly as much as a few
notches if the development is rapid in improvement or deterioration of the issuer’s liquidity positions
on some drastic change in its financial management policy or relations with fund procurement sources,etc.
E) Creditworthiness of the Government, etc. that Constitute the Framework of Credit Enhancement
The credit rating herewith presented could be changed if and when the assumptions made at the time ofits determination turn out to be inaccurate with regard to the creditworthiness of the government, etc.
that constitute the framework of credit enhancement. JCR assumes the resultant change of the credit
rating is most likely by a notch. The change could be as much as a few notches should thecreditworthiness of said government, etc. change so greatly.
on the Representations, Warranties, and Enforcement Mechanisms of an Asset-backed
14 Information
Security as Required by Paragraph (a)(1)(ii)(N) of rule 17g-7
The credit rating herewith presented is not for an ABS product, and hence no relevant issue.

Japan Credit Rating Agency, Ltd.
Jiji Press Building, 5-15-8 Ginza, Chuo-ku, Tokyo 104-0061, Japan
Tel. +81 3 3544 7013, Fax. +81 3 3544 7026

5/5

The Historical Performance of the Credit Rating
Issuer Name

Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation

Issue Name

Publication Date

RatingOutlook/Direction

Issuer(Long-term)

March 17, 2014

AA

StableIssuer(Long-term)

December 5, 2014

AA

StableIssuer(Long-term)

December 4, 2015

AA

StableIssuer(Long-term)

July 15, 2016

AA

Negative

Issuer(Long-term)

February 16, 2017

AA

Negative

Issuer(Long-term)

January 23, 2018

AA

Negative

Issuer(Long-term)

August 10, 2018

AA

StableIssuer(Long-term)

January 30, 2019AA

Positive

Issuer(Long-term)

February 14, 2020

AA+

StableIssuer(Long-term)

February 24, 2021

AA+

StableIssuer(Long-term)

March 1, 2022

AA+

StableBonds no.2

December 4, 2015

AA

Bonds no.2

February 16, 2017AA

Bonds no.2

January 23, 2018AA

Bonds no.2

January 30, 2019AA

Bonds no.2

February 14, 2020

AA+

Bonds no.2

February 24, 2021

AA+

Bonds no.2

March 1, 2022

AA+

Bonds no.3

April 15, 2016AA

Bonds no.3

February 16, 2017AA

Bonds no.3

January 23, 2018AA

Bonds no.3

January 30, 2019AA

Bonds no.3

February 14, 2020

AA+

Bonds no.3

February 24, 2021

AA+

Bonds no.3

March 1, 2022

AA+

Bonds no.4

April 13, 2018AA

Bonds no.4

January 30, 2019AA

Bonds no.4

February 14, 2020

AA+

Bonds no.4

February 24, 2021

AA+

Bonds no.4

March 1, 2022

AA+

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The Historical Performance of the Credit Rating
Issuer Name

Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation
Kanagawa Prefectural Housing
Supply Corporation

Issue Name

Publication Date

Rating

Bonds no.5

April 13, 2018AA

Bonds no.5

January 30, 2019AA

Bonds no.5

February 14, 2020

AA+

Bonds no.5

February 24, 2021

AA+

Bonds no.5

March 1, 2022

AA+

Bonds no.6

April 12, 2019AA

Bonds no.6

February 14, 2020

AA+

Bonds no.6

February 24, 2021

AA+

Bonds no.6

March 1, 2022

AA+

Bonds no.7

April 12, 2019AA

Bonds no.7

February 14, 2020

AA+

Bonds no.7

February 24, 2021

AA+

Bonds no.7

March 1, 2022

AA+

Bonds no.8

April 10, 2020

AA+

Bonds no.8

February 24, 2021

AA+

Bonds no.8

March 1, 2022

AA+

Bonds no.9

April 10, 2020

AA+

Bonds no.9

February 24, 2021

AA+

Bonds no.9

March 1, 2022

AA+

Bonds no.10

April 9, 2021

AA+

Bonds no.10

March 1, 2022

AA+

Bonds no.11

April 15, 2022

AA+

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Outlook/Direction

Attachment