APPROXIMATELY $60 BILLION OF DEBT AFFECTED
New York, February 21, 2012 -- On February 15, 2012 Moody's announced that it had placed
certain obligations of multiple financial institutions under review for
downgrade. Please use the URLs listed below to access Moody's
announcements of these reviews:
(1) http://www.moodys.com/research/Moodys-Reviews-Ratings-for-Banks-and-Securities-Firms-with-Global--PR_238006
; and
(2) http://www.moodys.com/research/Moodys-Reviews-Ratings-for-European-Banks--PR_237914
.
In connection with these bank reviews Moody's has initiated reviews
for downgrade the ratings of US public finance sector transactions as
detailed below.
OBLIGATIONS RATED BASED SOLELY ON SUPPORT FROM BANKS PLACED UNDER REVIEW
FOR DOWNGRADE
In connection with these bank reviews Moody's has initiated reviews
for downgrade the ratings of US public finance sector transactions,
where such ratings are based solely on support (in the form of letters
of credit and other similar type support facilities) provided by institutions
listed in the announcements referenced above.
Please click on the following links for the lists of affected credit ratings.
These lists are an integral part of this press release and identify each
affected transaction.
Issues supported by letters of credit provided by Bank of America,
N.A.: http://www.moodys.com/viewresearchdoc.aspx?docid=PBM_PBM139980
Issues supported by letters of credit provided by JPMorgan Chase Bank,
N.A: http://www.moodys.com/viewresearchdoc.aspx?docid=PBM_PBM139981
Issues supported by letters of credit provided by 22 Other Banks:
http://www.moodys.com/viewresearchdoc.aspx?docid=PBM_PBM139982
Custodial Receipts: http://www.moodys.com/viewresearchdoc.aspx?docid=PBM_PBM139929
The principal methodology used in these ratings was Moody's Methodology
for Rating U.S. Public Finance Transactions Based on the
Credit Substitution Approach published in August 2009. Please see
the Credit Policy page on www.moodys.com for a copy of this
methodology.
These ratings will change up or down whenever the rating of the applicable
bank providing support moves up or down.
OBLIGATIONS RATED BASED ON LIQUIDITY SUPPORT FROM BANKS THE SHORT-TERM
RATINGS OF WHICH HAVE BEEN PLACED UNDER REVIEW FOR DOWNGRADE
In connection with the bank reviews described above Moody's has
initiated reviews for downgrade of the short-term ratings of US
municipal obligations where such ratings are based on standby bond purchase
agreements and similar facilities ("liquidity facilities")
provided by institutions listed in the announcements to which links are
provided above. Moody's long-term ratings of these
obligations are not affected by these reviews.
The short-term ratings discussed in this announcement are based
primarily on the short-term ratings of the bank providing liquidity
support. Because severe credit events relating to the underlying
obligor can result in termination of liquidity facilities without investors
having the opportunity to tender their bonds the short-term ratings
based on 3rd party liquidity support also reflect the credit of the underlying
obligor or obligation.
Please click on the following link for the list of affected credit ratings.
This list is an integral part of this press release and identifies each
affected transaction.
Issues Supported by standby bond purchase agreements: http://www.moodys.com/viewresearchdoc.aspx?docid=PBM_PBM139927
The principal methodology used in the ratings discussed herein was Moody's
Methodology for Rating Variable Rate Instruments Supported by Third-Party
Liquidity Providers Published November 2006. Please see the Credit
Policy page on www.moodys.com for a copy of this methodology.
These ratings will change up or down whenever the short-term rating
of the bank providing liquidity support moves up or down. In addition,
they may move down when the rating of the underlying obligor moves down.
TENDER OPTION BONDS WITH LIQUIDITY SUPPORT FROM BANKS THE SHORT-TERM
RATINGS OF WHICH HAVE BEEN PLACED UNDER REVIEW FOR DOWNGRADE
In connection with the bank reviews described above Moody's has
initiated reviews for downgrade of the short-term ratings of tender
option bonds ("TOBs) where such ratings are based on liquidity facilities
provided by institutions listed in the announcements to which links are
provided above. Moody's long-term ratings of these
obligations are not affected by these reviews.
The short-term ratings discussed in this announcement are based
primarily on the short-term ratings of the bank providing liquidity
support. Because severe credit events relating to the asset underlying
the TOB can result in termination of liquidity facilities without investors
having the opportunity to tender their bonds the short-term ratings
based on 3rd party liquidity support also reflect the credit of the underlying
asset.
Please click on the following links for the lists of affected credit ratings.
These lists are an integral part of this press release and identify each
affected transaction.
Tender option bonds with liquidity support from Bank of America,
N.A.: http://www.moodys.com/viewresearchdoc.aspx?docid=PBM_PBM139983
Tender option bonds with liquidity support from 7 other banks: http://www.moodys.com/viewresearchdoc.aspx?docid=PBM_PBM139984
The principal methodology used in the ratings discussed herein was Moody's
Methodology for Rating Variable Rate Instruments Supported by Third-Party
Liquidity Providers published November 2006 and Moody's Rating Methodology
for Tender Option Bonds published September 2005. Please see the
Credit Policy page on www.moodys.com for a copy of this
methodology.
These ratings will change up or down whenever the short-term rating
of the bank providing liquidity support moves up or down. In addition,
they may move down when the rating of the underlying asset moves down.
OBLIGATIONS RATED BASED ON SUPPORT FROM BANKS PLACED UNDER REVIEW THE
LONG TERM RATINGS OF WHICH ARE BASED ON A JOINT DEFAULT ANALYSIS
Moody's Investors Service has initiated reviews for downgrade of the long-term
ratings of 261 U.S. public finance sector transactions rated
based on a joint default analysis ("JDA"). The affected transactions
are supported by letters of credit ("LOCs") provided by 12 banks placed
under review for downgrade on February 15, 2012. In addition,
Moody's has initiated reviews of the short-term ratings of
84 LOC supported obligations the long-term ratings of which are
based on a joint default analysis.
Please click on the following link for the list of affected credit ratings.
This list is an integral part of this press release and identifies each
affected transaction.
Transactions whose long-term ratings are based on a JDA:
http://www.moodys.com/viewresearchdoc.aspx?docid=PBM_PBM139930.
The long-term JDA rating on each of these debts reflects Moody's
approach to rating jointly supported transactions and takes into account
(i) the long-term rating of the applicable bank as letter of credit
provider, (ii) the underlying rating assigned to the applicable
obligation, (iii) the structure and legal protections of the transaction,
which ensure timely debt service payments to investors; and (iv)
the default dependence between the applicable bank and borrower.
The short-term rating of the applicable obligation is based solely
upon the short-term rating of the applicable bank as provider of
the letter of credit. These rating actions do not affect the underlying
ratings of the affected transactions and do not reflect Moody's opinion
of the involved borrowers' credit quality or the default dependence between
the applicable bank and borrower.
What Could Change the Ratings-Down
Long-term JDA Ratings: The long-term rating for the
applicable transaction could be lowered if the long-term rating
of the applicable bank or the long-term rating of the underlying
obligation is downgraded or if there is an increase in the default dependence
between the applicable borrower and the bank.
Short-term: The short-term rating on the applicable
transaction will be lowered if the short-term rating of the applicable
bank is downgraded.
What Could Change the Ratings-Up
Long-term JDA Ratings: The long-term rating for the
applicable transaction could be raised if the long term rating on the
bank or the long-term rating of the underlying bonds is upgraded
or (if the default dependence is greater than low) there is a decrease
in the default dependence between the applicable borrower and the bank.
Short-term: N/A
The principal methodologies used in these ratings are Applying Global
Joint Default Analysis to Letter of Credit Backed Transactions in the
US Public Finance Sector published in October of 2010 and Moody's
Methodology for rating US Public Finance Transactions Based on the Credit
Substitution Approach published in August 2010. Please see the
Credit Policy page on www.moodys.com for copies of these
methodologies.
REGULATORY DISCLOSURES
Although these credit ratings have been issued in a non-EU country
which has not been recognized as endorsable at this date, these
credit ratings are deemed "EU qualified by extension" and
may still be used by financial institutions for regulatory purposes until
30 April 2012. Further information on the EU endorsement status
and on the Moody's office that has issued a particular Credit Rating
is available on www.moodys.com.
For ratings issued on a program, series or category/class of debt,
this announcement provides relevant regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides relevant regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides relevant regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Information sources used to prepare the ratings are the following:
parties involved in the ratings and public information.
Moody's considers the quality of information available on the rated
entities, obligations or credits satisfactory for the purposes of
issuing these ratings.
Moody's adopts all necessary measures so that the information it
uses in assigning the ratings is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
The below contact information is provided for information purposes only.
Please see the issuer page on www.moodys.com for Moody's
regulatory disclosure of the name of the lead analyst and the office that
has issued the credit rating.
Please see Moody's Rating Symbols and Definitions on the Rating
Process page on www.moodys.com for further information on
the meaning of each rating category and the definition of default and
recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com
for the last rating action and the rating history. The date on
which some ratings were first released goes back to a time before Moody's
ratings were fully digitized and accurate data may not be available.
Consequently, Moody's provides a date that it believes is
the most reliable and accurate based on the information that is available
to it. Please see the ratings disclosure page on our website www.moodys.com
for further information.
Thomas Jacobs
VP - Senior Credit Officer
Public Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Michael J. Loughlin
Vice President - Senior Analyst
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
MOODY'S REVIEWS RATINGS OF US MUNICIPAL SECTOR OBLIGATIONS SUPPORTED BY LOCs, LIQUIDITY FACILITIES AND SIMILAR COMMITMENTS PROVIDED BY 26 BANKS
