The change in outlook for Honda Finance follows the change in outlook to stable from negative on the Honda's ratings, reflecting the recovery in its unit sales and margins from the trough of the pandemic, and our expectation that the company will keep its EBITA margin around 5% over the coming 12 to 18 months.Honda Finance's unchanged baa3 standalone assessment reflects its strong asset quality, backed by low nonperforming loan (NPL) and low residual value risk healthy capital buffer and high dependence on wholesale funding, mitigated by low reliance on secured funding. See more detail for Honda's outlook change on affirmed ratings are as follows:- Backed Senior Unsecured (Domestic): A3- Backed Senior Unsecured Shelf (Domestic): (P)A3- Backed Commercial Paper (Domestic): Prime-2- Outlook: changed to stable from negativeRATINGS RATIONALEThe affirmation of Honda Finance's ratings reflects Moody's unchanged assessment of the company's baa3 standalone assessment and assumptions of affiliate support. Honda's stronger credit profile will have positive implications for Honda Finance's access to funding and its financing volumes. (Honda, A3 stable), Honda Finance's ultimate parent. The rating outlook was changed to stable from negative.Today's rating action follows the change in outlook to stable from negative on the ratings for Honda Motor Co., Ltd. has affirmed Honda Finance Co., Ltd.'s (Honda Finance) A3 backed senior unsecured rating and its Prime-2 backed commercial paper rating. Rating Action: Moody's affirms Honda Finance's A3 ratings changes outlook to stableGlobal Credit Research - Tokyo, Ma- Moody's Japan K.K.
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