Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
New Issue:

CORRECTION TO TEXT, JAN. 14, 2011 RELEASE: MOODY'S ASSIGNS A1 RATING TO GEORGIA TECH ATHLETIC ASSOCIATION'S $96.0 MILLION OF SERIES 2011 REVENUE BONDS; OUTLOOK IS NEGATIVE

14 Jan 2011

FOUNDATION AFFILIATED WITH GEORGIA INSTITUTE OF TECHNOLOGY; $96.0 MILLION OF PRO FORMA RATED DEBT

Development Authority of Fulton County, GA
Not-for-Profit Organization
GA

Moody's Rating

ISSUE

RATING

Revenue Bonds (Georgia Tech Athletic Association Project), Series 2011

A1

  Sale Amount

$96,045,000

  Expected Sale Date

01/24/11

  Rating Description

Public University Foundation Revenue

 

 
Moody's Outlook   Negative
 

Opinion

NEW YORK, Jan 14, 2011 -- Correction to Moody's Outlook section above the Opinion section. Revised release follows.

Moody's Investors Service has assigned an A1 rating to $96.0 million of Revenue Bonds, Series 2011 to be issued by the Development Authority of Fulton County on behalf of the Georgia Tech Athletic Association (GTAA). The rating outlook is negative. We have withdrawn the A1 rating on the previously rated Series 2010 Revenue Bonds due to the postponed sale. We have also affirmed our underlying A1 rating on the Series 2008A Bonds which are to be refunded. The Series 2008A bonds are variable rate and are rated Aa1/VMIG based on the joint obligation of GTAA and The Northern Trust Company (rated Aa3).

RATINGS RATIONALE: GTAA is a nonprofit corporation whose mission is to administer the intercollegiate athletic programs of Georgia Institute of Technology (Georgia Tech), (lease revenue rental bonds rated Aa3). The A1 rating reflects a pro forma 62% increase in debt with pro forma maximum annual debt service comprising 27.8% of FY 2010 operating expenses, as well as some uncertainty around the Association's debt and swap liabilities over the near term given the counterparty's swap option and related call provisions of the Series 2001 Revenue Bonds.

USE OF PROCEEDS: Bond proceeds will be used to fund a variety of athletic facilities including a major renovation of GTAA's basketball coliseum ($50 million project cost), construction of an indoor football facility ($9 million project cost), renovation and expansion of GTAA's indoor/outdoor tennis facility ($8 million), refunding of the Series 2008A Bonds ($21 million outstanding), creating a capitalized interest fund ($7 million) as well as to pay for costs of issuance.

LEGAL SECURITY: The Series 2011 bonds are a general obligations of Georgia Tech Athletic Association, a Georgia non-profit corporation, and its successors and assigns under the Loan Agreement. Effective July 1, 2008 the Alexander-Tharpe Fund, Inc. (Fund) moved from being a blended component unit of GTAA to being legally merged with GTAA. There is no debt service reserve requirement for the Series 2011 Revenue Bonds. There is a cash funded debt service reserve fund at $1.25 million for the to be refunded Series 2008A Revenue Bonds.

DEBT-RELATED INTEREST RATE DERIVATIVES: In March 2004, GTAA entered into a single exercise swaption (exercise date of April 1, 2012) with UBS AG (rated Aa3), with GTAA receiving $2.4 million at the outset. Under the agreement GTAA would pay an average fixed rate of 5.125% on a notional amount tied to its fixed rate Series 2001 bonds ($102.9 million outstanding at FYE 2010). Under certain scenarios, including the insurer's (Ambac) financial strength downgrade by S&P below A-, GTAA could be required to post collateral. As of December 31, 2010, the swaption had a mark-to-market valuation of a $12.5 million liability to GTAA. While with the current plan of finance the Series 2008A bonds will be retired on March 1, 2011, in the interim weeks we note that posting collateral would meet the definition of establishing a Lien according to the Northern Trust Reimbursement Agreement (associated with the Series 2008A bonds to be refunded), and as such would be a covenant violation under the Reimbursement Agreement, increasing the likelihood of acceleration of the principal amount of the Series 2008A bonds. Moody's believes that in addition to certain temporarily restricted assets at GTAA, other units of Georgia Tech, including the Georgia Tech Foundation, could be called on in the event of a need to post collateral, thereby reducing the chance of the covenant violation. We believe the presence of the swaption somewhat increases the likelihood of a variable rate refinancing of the Series 2001 bonds in 2012. Our A1 rating incorporates the risks associated with the swaption, offset somewhat by stated plan of Georgia Tech management to use resources from other affiliated entities in the event the derivative or a covenant violation in the Reimbursement Agreement trigger an unscheduled demand on liquidity from the bank.

STRENGTHS

*Long history of administering intercollegiate athletics at Georgia Institute of Technology as a non-profit corporation organized in 1934. GTAA receives a mandatory student fee paid by all Georgia Tech students creating a close tie to Georgia Tech (rated lease debt of affiliated organizations is Aa3), which benefits from favorable student demand and impressive sponsored research activity.

*GTAA has diverse revenue sources including contributions, Atlantic Coast Conference distributions, ticket sales, student fees, royalties and other revenues. Gift revenue has averaged $15 million annually over the last three years.

*Demonstrated ability to reduce expenditures with $2.7 million in expenses cut from ongoing operations in response to the recent recession.

*Well-diversified investment portfolio which is managed by the Georgia Tech Foundation. Total financial resources were $81.4 million as of June 30, 2010.

*Limited expected capital needs with current and recent plant investments with no additional borrowing plans.

CHALLENGES

*Weak operating performance as calculated by Moody's (with a 5% trailing average endowment draw) of negative 9% driven by accelerated expenditure of quasi-endowment funds from an unrestricted bequest. We believe the elevated endowment draws may have a lasting impact of the financial resource base of GTAA, as endowment spending rates exceed investment returns in some years Unrestricted financial resources of GTAA declined to negative $10 million at FYE 2010.

*Considerable debt burden with actual debt service reaching 15% of operating expenses in FY 2010. Sustained peak debt service including debt service on the Series 2011 bonds, represents 27.8% of FY 2010 expenses.

*While the pro forma debt structure reduces the current $21 million of demand debt, the swaption exposure somewhat increases the likelihood of additional variable rate debt in 2012. The swaption also creates potential demands on liquidity with the December 31, 2010 liability of $12.5 million above FY 2010 monthly liquidity of $9.2 million.

*Limited unrestricted liquidity relative to expense base with $9.2 million of monthly liquidity based on Moody's methodology for analyzing monthly liquidity, which translated into 66 monthly days cash on hand for FYE 2010. Limited unrestricted liquidity somewhat mitigated by expendable funds with relatively broad restrictions of $47 million.

*Athletic revenue sources at any higher education institution are prone to greater variability because revenue is based on demand for ticketed events, coach compensation negotiations, Conference distributions, as well as potential for National Collegiate Athletic Association (NCAA) penalties.

*Ongoing need to invest in capital facilities to remain competitive with athletic opponents could lead to additional debt, although GTAA has no current plans for additional borrowing.

MARKET POSITION/COMPETITIVE PROFILE: IMPORTANT ROLE AS AFFILIATED SUPPORT ORGANIZATION FOR GEORGIA INSTITUTE OF TECHNOLOGY CHARGED WITH ADMINISTERING ATHLETICS

The Georgia Tech Athletic Association (GTAA) was organized in 1934 to administer intercollegiate athletics at Georgia Tech, which currently fields teams in 17 varsity sports. The association receives a mandatory student fee from all Georgia Tech students (averaging $4.5 million over the past two years and benefiting from a recent increase) and attracts gifts for athletics. Fan attendance as well as event and ticket revenues remain dominated by football and men's basketball.

Moody's anticipates that Georgia Tech (lease-backed debt of Georgia Tech Facilities rated Aa3) will remain one of the nation's leading technology-oriented educational and research institutions. Selective undergraduate and graduate programs enrolled 19,421 full-time equivalent students the fall of 2010. As one of the nation's leading public universities in dollar volume of research awards, Georgia Tech is well-positioned to continue garnering a strong share of grant and contract funding from governmental and private sources. Research expenditures totaled $494 million in FY 2010, not including the activity of the applied research arm, Georgia Tech Research Institute. For more information about Georgia Institute of Technology, please see our report dated April 29, 2010.

OPERATING PERFORMANCE: WEAK OPERATING PERFORMANCE DRIVEN BY SPENDING OF QUASI-ENDOWMENT AND EXPENDITURE PRESSURE COMBINED WITH LARGE DEBT SERVICE OBLIGATIONS

Moody's calculates a three-year average operating margin deficit of 9.0% through FY 2010 for GTAA. Driven by spending pressure, as well as draws on endowment and quasi-endowment well in excess of Moody's 5% model. The weak performance has not been adequate to cover debt service, with actual debt service coverage averaging 0.8 times from FY 2008-FY2010. With a relatively large depreciation and interest expense, the operating cash flow margin has been strongly positive and improving demonstrated by a 17% cash flow margin in FY 2010.

Moody's is concerned about the long term spending power of GTAA's financial resources given the high rate of endowment spending in recent years. For example, in FY's 2005 and 2006 net assets decreased despite strongly positive investment returns because of the GTAA's elevated spending rate of quasi-endowment funds to support operations. The debt service burden will increase with the new borrowing, as a portion of the new facilities are not expected to generate a material amount of additional revenues. However, GTAA expects to receive unrestricted gifts associated with some of the capital projects. Estimated peak annual debt service amounts to 27% of FY 2010 operating expenses, pointing to a substantial debt burden. Projected debt service will be in the $13.7 to $13.9 million range between FY 2014 and FY 2023, a substantial burden given the FY 2010 operating revenue base of $54 million.

Revenue sources remain relatively diverse led by auxiliary sources (23%), ticket sales (22%), conference distributions (23%), gifts (7%) and mandatory student fees (9%). As an athletic revenue system, Moody's believes that GTAA is exposed to the potential for material variability in demand for ticketed events, coach compensation negotiations, as well as potential for National Collegiate Athletic Association (NCAA) penalties. Management's multi-year cash flow forecasts have increased in sophistication over the past few years and do demonstrate a plausible scenario for revenue growth over the next half decade driven largely by increases in distributions from the Atlantic Coast Conference from broadcasting rights, facility related fundraising success, as well as endowment draws fueled by new gifts and assumed long term investment performance.

BALANCE SHEET POSITION: DONOR SUPPORT HAS ALLOWED GTAA TO BUILD RESERVES BUT FLEXIBILITY IS LIMITED AS DEBT INCREASES 62%

Moody's believes that GTAA has benefited from donor support to build reserves which is demonstrated by a total financial resource base of $81 million at the end of FY 2010. However, resources have declined from investment losses while pro forma debt has increased 87% from the amount outstanding at FYE 2008 with pro forma debt of $196 million. Unrestricted financial resources are much weaker, at negative $10 million at the end of FY2010. Expendable financial resources include the assets received by the estate of Lee Candler, which totaled $26.4 million as of FY 2010. The Candler Fund has its own committee that makes spending decisions based in part on the advice from and needs of GTAA. Expendable financial resources of $18 million cushion pro forma debt a low 0.1 times and 33% of annual operating expenses at the end of FY 2010. At the time of our rating in December 2008, GTAA signaled no future borrowing plans at that time and management reports no future borrowing plans at this time. Capital spending pressure could develop, however, given the demands of competitive athletic programs and limited capital support for related facilities from Georgia Tech.

GTAA has a solid trend of gift revenue with average total gift revenue of $15.5 million over the past three years. GTAA had a $150 million goal in the Campaign for Georgia Tech, and had gifts and commitments of $159 through August 2009, with 66% of the total pledged amount received to date. While 46% of gifts through that same date were for current operations, 31% was for endowment including student scholarships, and 23% for facilities and equipment.

GTAA invests its long term funds with the Georgia Tech Foundation (debt rated Aa1). Annual investment returns were approximately 12.5% in FY 2010. The Foundation's diversified investment portfolio was allocated as follows as of 7/31/10: 26% private equity, 20% diversifying strategies including hedge funds, 13% U.S. equities, 13% global and foreign equities, 11% fixed income, 6% real assets, 6% real estate and 5% cash. Outstanding commitments to alternatives investments were $135 million as of June 30, 2010, for a $1.1 billion pool of funds.

Based on Moody's methodology for analyzing monthly liquidity, GTAA held $9.2 million in unrestricted monthly liquidity as of June 30, 2010, which translated into a limited 40 monthly days cash on hand (days cash on hand from investments liquid within one month) and 26% of then outstanding demand debt. Following issuance of the Series 2010 bonds, there will be no variable rate demand debt. For a discussion of the risks related to the to be refunded Series 2008A letter of credit, please see our GTAA report dated December 15, 2008. In addition to the unrestricted resources, GTAA also has donor restricted funds which are well matched to its expense base. The $28 million of the permanently restricted funds are all for student athlete scholarships that comprise 15% of the budgeted operating expenses in FY 2011. In addition, certain temporarily restated assets could be expended in their entirety as needed including the Candler Fund ($26 million as of June 30, 2010), the GTAA Long Term Support Fund ($7 million), and the Athletic Director's Initiative Fund ($5 million).

Outlook

The negative credit outlook is based on the dramatic increase in debt and reflects the possibility that the cash flow of GTAA will not improve in line with the steep increases in debt service obligations. Our negative outlook also reflects concerns around the potential for collateral posting requirements with the swap as well as the potential for a refunding debt structure which includes a material amount of demand debt when the Series 2001 bonds become callable.

What could change the rating - UP

Growth in unrestricted financial resources relative to debt and operations and sustained improvement in operating cash flow; a move to positive unrestricted financial resources combined with a conservative debt and swap profile

What could change the rating - DOWN

Increase in debt; inability to improve operating cash flow in light of debt service commitments; sustained financial resource declines through investment losses or extraordinary spending from the long term pool; refunding of the Series 2001 bonds that includes a material amount of demand debt

KEY INDICATORS

(FY 2010 financial data)

Total Pro Forma Direct Debt: $196 million

Pro Forma Direct Debt to Operations: 3.6 times

Expendable Financial Resources: $18 million

Expendable Resources to Pro-Forma Debt: 0.09 times

Expendable Resources to Operations: 0.95 times

Monthly Unrestricted Liquidity: $9.2 million

Monthly Days Cash (unrestricted funds available within 1 month divided by operating expenses excluding depreciation, divided by 365 days): 66 days

Peak Debt Service to Operations: 27.8%

Total Revenues: $54 million

Average Operating Margin: -9.0%

Average Actual Debt Service Coverage: 0.8 times

RATED DEBT

Series 2008A (to be refunded): A1 underlying; Aa1/VMIG based on letter of credit with Northern Trust

Series 2011: A1

CONTACTS

GTAA: Frank Hardymon, Associate Athletic Director - CFO, 404-894-8129

Underwriter: Bank of America Merrill Lynch, Jay Bellwoar, Managing Director, 215-446-7042

The principal methodology used in this rating was Public College and Universities published November 2006.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information

Moody's Investors Service considers the quality of information available on the credit satisfactory for the purposes of assigning a credit rating.

Moody's adopts all necessary measures so that the information it uses in assigning a credit rating 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.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service 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.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

Analysts

Dennis M. Gephardt
Analyst
Public Finance Group
Moody's Investors Service

Erin V. Ortiz
Backup Analyst
Public Finance Group
Moody's Investors Service

Contacts

Journalists: (212) 553-0376
Research Clients: (212) 553-1653


Moody's Investors Service
250 Greenwich Street
New York, NY 10007
USA

CORRECTION TO TEXT, JAN. 14, 2011 RELEASE: MOODY'S ASSIGNS A1 RATING TO GEORGIA TECH ATHLETIC ASSOCIATION'S $96.0 MILLION OF SERIES 2011 REVENUE BONDS; OUTLOOK IS NEGATIVE
No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH  CURRENT OPINIONS. MOODY'S INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND  OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES  ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR  PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating 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 or in preparing its Publications.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​​​
Moodys.com