24-D-0813
September 11, 2024

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

ZENSHO HOLDINGS CO., LTD. (security code: 7550)<Rating Change>
Long-term Issuer Rating:
Outlook:Bonds:
Subordinated Loan:
Shelf Registration:
CP:from BBB+ to AStablefrom BBB+ to Afrom BBB- to BBB
from Preliminary BBB+ to Preliminary Afrom J-2 to J-1

Rationale(1) ZENSHO HOLDINGS CO., LTD. (the “Company”) is the holding company of Japan’s largest
restaurant chain group. With various business formats, including Sukiya beef bowl restaurants,
Coco’s family restaurants and Hamazushi 100-yen sushi restaurants, it operates 15,341 stores athome and abroad (as of the end of June 2024). Having strength in the mass merchandising systemthat integrates everything from the procurement of raw ingredients to manufacturing, processing,logistics and sales and through its group companies, it boasts the industry-leading procurement
capacity for food ingredients and delivery network. In an effort to become the world’s number one
company in the food industry, it has been working on business expansion, as part of which it acquired
hamburger shop operator Lotteria Co., Ltd. in April 2023 and SnowFox Topco Limited (“SnowFox”)
operating sushi takeout stores, etc. primarily in North America and the U.K. in September 2023.
(2) The earnings level has further improved and the performance is expected to remain steady in the
future as well. In the core business formats of Sukiya and Hamazushi, competitiveness has beenfurther strengthened in the categories due to success of the product and price strategies capturingconsumer needs. The top-line has grown through rising the number of customers and spending per
customer. This suggests that profitability per store has risen. Furthermore, in the sushi takeout format
overseas, SnowFox has also been steadily making profit contribution following AFC, and earnings
foundation has been expanding. JCR views that the Company’s performance will likely continue togrow into the future underpinned by continuing to expand new store openings and the high ability to
attract customers. Although interest-bearing debt increased because of acquisition of SnowFox, theimpact on financial structure remained limited due to the financial measures including issuing
preferred shares and capital increase. On the back of favorable performance, financials are expected
to improve going forward. Based on the above, JCR has upgraded the ratings on the Company by
one notch with Stable outlook.
(3) For the fiscal year ending March 2025 (FY2024), the Company forecasts an operating income toincrease 16.4% from the previous fiscal year to 62.5 billion yen, expecting to achieve a record highfor three consecutive fiscal years. Since reporting 21.7 billion yen for FY2022, breaking away fromthe impact of COVID-19, a pace of performance growth has been accelerating by honing thebusiness formats and stores and realizing effects of M&As, among others. Recently, global fast foodsegment, centering of AFC and SnowFox, has been expanding. JCR will pay attention to whether
the Company can expand the earning capacity further through rising the synergy effects of the entire
group, including abilities of foodstuff procurement and product development, the Company’s
advantages.
(4) Equity capital and its ratio as at the end of FY2023 were 239.3 billion yen and 32.0%, as opposed to155.6 billion yen and 33.1% a year before (after consideration of equity content of subordinatedloans). Recently, the Company has been maintaining the operation policy giving consideration tofinancial soundness such as fundraising through issuing hybrid securities, and public offerings. While
the proportion of the amount equivalent to equity content of hybrid securities in the capital structureis still at a high level, equity capital accumulation by profits is also expected to progress at a fast
pace. Underpinned by high cash flow generation ability, JCR views that the financial structure istrending improvement in the midst of actively making investment.
Shigenobu Tonomura, Misa Ishizaki

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

Rating
Issuer: ZENSHO HOLDINGS CO., LTD.
<Rating Change>

Long-term Issuer Rating: AOutlook: Stable
Issue
Amount (bn)Issue Date
Due Date
Coupon Rating
Bonds no. 3
JPY 10Dec. 13, 2021 Dec. 13, 2024 0.340%
ABonds no. 4
JPY 5
Dec. 13, 2021 Dec. 11, 2026 0.440%
ABonds no. 5 (sustainability bonds)
JPY 10June 13, 2022 June 11, 2027 0.710%
AIssueAmount (bn)
Execution Date
Repayment Date
Interest Rate Rating
Subordinated Loan
JPY 10Feb. 10, 2021
Feb. 10, 2056
(Note 1)BBB
Subordinated Loan
JPY 10
Sept. 30, 2022
Sept. 30, 2057
(Note 2)BBB
Subordinated Loan
JPY 30June 30, 2023
June 28, 2058
(Note 3)BBB
Subordinated Loan
JPY 30Mar. 29, 2024
Mar. 31, 2059
(Note 4)BBB
Subordinated Loan
JPY 20June 28, 2024
June 30, 2059
(Note 5)BBB
Notes:
1. Base rate + initial spread for the interest periods beginning on any date from the Execution Date tobut excluding the interest payment date in February 2026. Base rate + initial spread + 1% step-up
interest rate for the interest periods beginning on or after said interest payment date.
2. Fixed interest rate for the interest periods beginning on any date from the Execution Date to but
excluding September 30, 2027. Base rate + initial spread + 1% step-up interest rate for the interest
periods beginning on or after that date.
3. Fixed interest rate for the interest periods beginning on any date from the Execution Date to but
excluding June 30, 2028. Base rate + initial spread + 1% step-up interest rate for the interest periods
beginning on or after that date.
4. Fixed interest rate for the interest periods beginning on any date from the Execution Date to but
excluding March 31, 2029. Base rate + initial spread + 1% step-up interest rate for the interest periods
beginning on or after that date.
5. Fixed interest rate for the interest periods beginning on any date from the Execution Date to but
excluding June 30, 2029. Base rate + initial spread + 1% step-up interest rate for the interest periods
beginning on or after that date.
Shelf Registration: Preliminary AMaximum: JPY 80 billion
Valid: Two years effective from August 8, 2023
CP: J-1
Maximum: JPY 10 billion

Rating Assignment Date: September 6, 2024
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 "JCR's Rating Methodology" (February 1, 2024), "Food Service" (June 1, 2023),"Rating Methodology for a Holding Company" (January 26, 2015), "Rating Viewpoints on Pure Holding Companies (Domestic
Industrial Corporations)" (July 1, 2003) and "Ratings of Hybrid Securities" (September 10, 2012) 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.
A preliminary rating is a credit rating assigned as a preliminary evaluation while material terms for issue to be rated are notyet finalized. When the issuing terms are finalized, JCR will confirm them and will assign a credit rating anew. The rating levelof the final rating may be different from that of the preliminary rating, depending on the final content of the terms, etc.

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.

Issuer:ZENSHO HOLDINGS CO.,LTD.

Rating Publication
Date:

September 11, 2024

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

1


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

2


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

3A) Business Bases

B) Financial Grounds and Asset QualityC) Liquidity Positions

1/5D) Related Parties’ Status and Stance of Support/ Assistance for the Issuer

E) Order of Seniority in Debt Payment

4

The Potential Limitations of the Credit Rating as Required by Paragraph (a)(1)(ii)(D) of Rule 17g-7Information on the Uncertainty of the Credit Rating as Required by Paragraph (a)(1)(ii)(E) of Rule
17g-7

5


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

6


Use of Servicer or Remittance Reports to Conduct Surveillance of the Credit Rating Required by
Paragraph (a)(1)(ii)(G) of Rule 17g-77

8The Types of Data Relied Upon for the Purpose of Determining the Credit Rating as Required by
Paragraph (a)(1)(ii)(H) of Rule17g-7

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

Overall 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

9






10 Information Relating to Conflicts of Interest as Required by Paragraph (a)(1)(ii)(J) of Rule 17g-7
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) Business Bases

B) Financial Grounds and Asset QualityC) Liquidity Positions

3/5D) Related Parties’ Status and Stance of Support/ Assistance for the Issuer

E) Order of Seniority in Debt Payment and Non-Payment Forgiven by Contract

F) Rise and Fall in General Economy and Markets

G) Various Events

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

12





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) Business Bases

B) Financial Grounds and Asset Quality

4/5C) Liquidity Risks

D) Order of Seniority in Debt Payment and Non-Payment Forgiven by Contract

E) Rise and Fall in General Economy and Markets

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
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

ormation 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
er factors, JCR makes no representation or warranty, express or implied, as to accuracy, results, adequacy, timeliness, co mpleteness or merchantability, or fitness for any particular purpose,h respect to any such information, and is not responsible for any errors or omissions, or for results obtained from the us e of such information. Under no circumstances will JCR be liable for
special, indirect, incidental or consequential 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,, strict liability or otherwise, and whether such damages are foreseeable or unforeseeable. JCR
arding 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
of fact as to credit risk decisions or recommendations regarding decisions
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
vailability of information as well as other factors. JCR retains all rights pertaininuding such rating data, is prohibited, whether or not wholly or partly, without prior consent of JCR.

R is registered as a "Nationally Recognized Statistical Rating Organization" with the U.S. Securities and Exchange Commission with respect to the following fo ur classes. (1) Financial
itutions, brokers and dealers, (2) Insurance Companies, (3) Corporate Issuers, (4) Issuers of government securities, municipal securities and foreign government securities.

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The Historical Performance of the Credit Rating
Issuer Name

Issue NameZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. Issuer(Long-term)
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. CP
ZENSHO HOLDINGS CO., LTD. Shelf Registration
ZENSHO HOLDINGS CO., LTD. Shelf Registration
ZENSHO HOLDINGS CO., LTD. Bonds no.3
ZENSHO HOLDINGS CO., LTD. Bonds no.3
ZENSHO HOLDINGS CO., LTD. Bonds no.3
ZENSHO HOLDINGS CO., LTD. Bonds no.4
ZENSHO HOLDINGS CO., LTD. Bonds no.4
ZENSHO HOLDINGS CO., LTD. Bonds no.4
ZENSHO HOLDINGS CO., LTD. Bonds no.5
ZENSHO HOLDINGS CO., LTD. Bonds no.5
ZENSHO HOLDINGS CO., LTD. Bonds no.5
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)
ZENSHO HOLDINGS CO., LTD. Loan(subordinated)

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Publication Date

RatingOutlook/Direction

November 9, 2011
November 29, 2012
September 11, 2013
August 6, 2014
September 3, 2014
November 10, 2014
March 26, 2015
February 10, 2016
February 1, 2017
January 26, 2018
February 25, 2019
November 15, 2019
December 11, 2020
October 27, 2021
November 2, 2022
October 31, 2023
March 21, 2012
November 29, 2012
September 11, 2013
September 3, 2014
November 10, 2014
March 26, 2015
February 10, 2016
February 1, 2017
January 26, 2018
February 25, 2019
November 15, 2019
December 11, 2020
October 27, 2021
November 2, 2022
October 31, 2023
August 8, 2023
October 31, 2023
December 7, 2021
November 2, 2022
October 31, 2023
December 7, 2021
November 2, 2022
October 31, 2023
June 7, 2022
November 2, 2022
October 31, 2023
March 22, 2019
November 15, 2019
December 11, 2020
October 27, 2021
November 2, 2022
October 31, 2023
February 5, 2021
October 27, 2021
November 2, 2022
October 31, 2023
September 28, 2022
November 2, 2022
October 31, 2023
March 31, 2023
October 31, 2023
March 26, 2024
June 25, 2024

BBB
BBB
BBB
#BBB
BBB#BBBBBBBBBBBBBBB
BBB
BBB
BBB
BBB+
BBB+
BBB+
J-2
J-2
J-2
J-2
#J-2
J-2
J-2
J-2
J-2
J-2
J-2
J-2
J-2
J-2
J-2
BBB+
BBB+
BBB+
BBB+
BBB+
BBB+
BBB+
BBB+
BBB+
BBB+
BBB+
BB+
BB+
BB+
BBBBBBBBBBB+BBBBBBBBBBBBBBBBBBBBBBBBBBBBBB-

StableStableStableNegative
StableNegative
StableStablePositive
StableStablePositive
Positive
StableStableStableNegative

Attachment

Attestation Required by Paragraph (a)(1)(iii) of Rule 17g-7

I, Mikiya Kubota, have responsibility to this Rating Action and to the best of my knowledge:

A) No part of the credit rating was influenced by any other business activities.
B) The credit rating was based solely upon the merits of the obligor, security, or money market
instrument being rated.
C) The credit rating was an independent evaluation of the credit risk of the obligor, security, or
money market instrument.

Mikiya Kubota
General Manager of Corporate Rating Department I

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

mation 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 asfactors, JCR makes no representation or warranty, express or implied, as to accuracy, results, adequacy, timeliness, co mpleteness or merchantability, or fitness for any particular purpose,
espect to any such information, and is not responsible for any errors or omissions, or for results obtained from the us e of such information. Under no circumstances will JCR be liable for
ecial, indirect, incidental or consequential 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,
rict liability or otherwise, and whether such damages are foreseeable or unforeseeable. JCR’s ratings and credit assessments are statements
ing 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
quidity risk or price fluctuation risk. JCR’s ratingsof fact as to credit andrisk decisions
creditor recommendations
assessments
regarding decisions are statem
chase, 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
ilability of information as well as other factors. JCR retains all rights pertaining to this document, including JCR’s rating data. Any rep
ing such rating data, is prohibited, whether or not wholly or partly, without prior consent of JCR.

s registered as a "Nationally Recognized Statistical Rating Organization" with the U.S. Securities and Exchange Commission with respect to the following fo ur classes. (1) Financial
tions, brokers and dealers, (2) Insurance Companies, (3) Corporate Issuers, (4) Issuers of government securities, municipal securities and foreign government securities.