Moodys.com
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:

MOODY'S ASSIGNS A2 LONG-TERM RATING TO STORMONT-VAIL HEALTHCARE'S (KS) SERIES 2011F FIXED RATE REVENUE BONDS; A2 PARITY RATING AFFIRMED; OUTLOOK REMAINS STABLE

22 Jul 2011

APPROXIMATELY $143 MILLION OF RATED DEBT TO BE OUTSTANDING

Kansas Development Finance Authority
Health Care-Hospital
KS

Moody's Rating

ISSUE

RATING

Fixed Rate Hospital Revenue Bonds, Series 2011F

A2

  Sale Amount

$60,025,000

  Expected Sale Date

08/15/11

  Rating Description

Hospital Revenue Bonds

 

 
Moody's Outlook   Stable
 

Opinion

NEW YORK, Jul 22, 2011 -- Moody's Investors Service has assigned an A2 long-term rating to Stormont-Vail HealthCare's (SVHC) $60.0 million of Series 2011F fixed rate refunding and improvement revenue bonds to be issued through the Kansas Development Finance Authority. Concurrent with this action, we have affirmed SVHC's A2 bond rating on approximately $137 million of outstanding bonds (see RATED DEBT section in this report). The rating outlook remains stable.

RATINGS RATIONALE

SUMMARY RATING RATIONALE: The affirmation of the A2 rating and stable rating outlook reflect SVHC's distinctly leading market position, continued favorable operating performance with improved results in interim fiscal year (FY) 2011, and maintenance of good debt ratios.

STRENGTHS

*Tertiary referral hospital with a distinctly leading market position in a two-hospital market and leading provider over a broad 13 county total service area.

*Track record of adequate operating margins with good results through eight months FY 2011 (11.3% operating cash flow margin).

*Good pro forma adjusted debt ratios including 2.4 times debt-to-cash flow, 6.1 times maximum annual debt service coverage, and 29% debt-to-total operating revenue.

*Location in Topeka, the Kansas State capital, provides demographic stability to the market.

*Manageable capital spending and no new money debt plans in the coming years.

CHALLENGES

*Despite SVHC's distinctly leading position, St. Francis Health Center represents notable competition in the market.

*Underfunded defined benefit pension plan, with a 65% pension funded ratio compared to a projected benefit obligation (PBO) of $206 million at audited fiscal year end (FYE) 2010.

*Pro forma liquidity ratios are somewhat modest for an A2 rated credit with 135 days cash on hand and 116% cash-to-debt (based on SVHC's unrestricted cash and investments at May 31, 2011).

DETAILED CREDIT DISCUSSION

USE OF PROCEEDS: The Series 2011F bond proceeds are expected to: (a) refund SVHC's Series 2008E long-term rate mode put bonds ($18.9 million outstanding at FYE 2010, whose initial mandatory put date is November 15, 2011) and Series 2001K fixed rate bonds ($40.98 million outstanding at FYE 2010); (b) release approximately $4.1 million debt service reserve fund (DSRF) currently in place supporting the Series 2001K bonds; (c) provide $10 million to support SVHC's capital plans; and (d) pay the costs of issuance. The Series 2011F bonds are not expected to include a DSRF.

LEGAL SECURITY: The bonds are expected to be secured by a pledge of receivables of the obligated group and a mortgage on certain system facilities, including SVHC's main campus medical center. SVHC, which currently is the only member of the obligated group, represents approximately 97% of Stormont-Vail HealthCare, Inc. and Affiliates (system) total assets and 99% of system operating revenues.

INTEREST RATE DERIVATIVES: SVHC has one interest rate swap agreement in place. In connection with the Series 2008E bonds, SVHC entered into a floating-to-fixed interest rate swap with Bank of America N.A. Under the swap SVHC pays a fixed rate of 4.09% and receives 68% of LIBOR. According to management, the net termination value was a negative $359,478 to SVHC as of May 31, 2011. There is no collateral posting requirement under the swap unless SVHC's rating falls below Baa2. The swap expires in November 2011.

MARKET POSITION/COMPETITIVE STRATEGY: DISTINCTLY LEADING MARKET POSITION

SVHC captures a distinctly leading market share in the two hospital market of Shawnee County (City of Topeka), KS. In addition to SVHC, the only other acute care provider in Topeka is St. Francis Health Center (a member of Aa3 rated Sisters of Charity of Leavenworth Health System). When SVHC acquired the Cotton-O'Neil Clinic in 1995 the market was approximately 50/50 between SVHC and St. Francis, respectively. Since that time, SVHC's market share has increased steadily and materially. According to management provided data, excluding out-migration, as of 2009 SVHC captured approximately 66% market share compared to St. Francis' approximately 34% share. SVHC also is the leader in a broad 13 county total service area, capturing approximately 35% share in 2010. St. Francis is the number two provider in the total service area with approximately 18% market share, while A2 rated Lawrence Memorial Hospital captured approximately 10% (no other hospital captured more than 10%).

Demographics in the Topeka area are stable, as Topeka is the state capital of Kansas. Both the City of Topeka and Shawnee County have general obligation bond ratings of Aa2. According to the Bureau of Labor Statistics and Kansas Department of Labor the unemployment rate in the Topeka metropolitan statistical area is well below the national average and in-line with the state average. According to the US Census Bureau, the median income level in Shawnee County is just below the state average and the county's population increased 4.7% between 2000 and 2010 (compared to 6.1% for Kansas and 9.7% for the USA).

OPERATING PERFORMANCE: TRACK RECORD OF ADEQUATE OPERATING RESULTS WITH GOOD PERFORMANCE IN INTERIM FY 2011

SVHC has a track record of recording adequate operating margins for an A2 rated credit, with good results in interim FY 2011. Through unaudited eight months FY 2011 (as of May 31, 2011) SVHC recorded adjusted operating income of $19.5 million (5.7% operating margin, adjusted to reclassify the portion of investment income included in operating revenue to non-operating) and operating cash flow of $38.4 million (11.3% operating cash flow margin). Through the comparable eight months in FY 2010 SVHC recorded a 1.9% adjusted operating margin and 7.8% operating cash flow margin. In audited FY 2010 (September 30 year end) SVHC recorded adjusted operating income of $12.3 million (2.5% margin) and operating cash flow of $40.7 million (8.4% margin). The A2 median operating cash flow margin is 9.7%. Between FY 2006 and FY 2010 SVHC's operating cash flow margin was quite stable and ranged from 8.4% to 9.0%.

The improved operating margins in interim FY 2011 are due to a number of factors, including: (a) unlike much of the rest of the country, SVHC continues to enjoy volume growth, including a 7.0% increase in inpatient admissions through eight months FY 2011 (following increases of 6.0% in FY 2009, 5.3% in FY 2008, and 8.0% in FY 2008) and a 13.1% gain in outpatient visits in interim FY 2011; (b) expanded number of cardiologist and geographic coverage; (c) the opening of a pediatric intensive care unit; and (d) a decline in average length of stay from 4.35 days through eight months FY 2010 to 4.15 days for the same period FY 2011.

Looking forward, SVHC management expects to maintain operating margins in-line with interim FY 2011 results; between FY 2011 and FY 2015 the system's operating margin is projected to range between 4.2% and 5.1%. While we expect SVHC will remain profitable we believe these projected margins may be optimistic given the pressures on the not-for-profit hospital sector, including tight future Medicare reimbursement as the federal government faces steep deficits.

BALANCE SHEET POSITION: SOMEWHAT MODEST LIQUIDITY RATIOS

Due to cash flow generation, investment returns, and somewhat limited capital spending, SVHC's absolute unrestricted cash and investments increased in recent years to $170 million at May 31, 2011 from $157 million at audited FYE 2010 and $143 million at FYE 2009. As a result, cash on hand improved slightly to a still somewhat modest 134 days at May 31, 2011 from 126 days at FYE 2010 and 126 days at FYE 2009 (A2 median is 169 days). Management expects to grow absolute liquidity and days cash on hand in the coming years.

According to management, at audited FYE 2010 SVHC's unrestricted cash and investments were allocated among approximately 60% cash and fixed income, 17% equities, and 24% hedge funds, and approximately 76% of the system's unrestricted cash and investments could be liquidated within one month.

SVHC's Moody's adjusted pro forma debt ratios are quite good at the A2 rating level, reflecting the system's good cash flow generation and relatively modest debt load. Based on SVHC's annualized unaudited eight months FY 2011 results and factoring the Series 2011F, adjusted pro forma debt-to-cash flow measures a favorably low 2.4 times (A2 median is 3.2 times), adjusted maximum annual debt service (MADS) coverage measures a good 6.1 times (A2 median is 5.0 times), and debt-to-total operating revenue measures a manageable 29% (A2 median is 34%). Pro forma cash-to-debt measures a more modest (although still adequate) 116% (A2 median is 132%).

SVHC completed its new patient tower in 2009 and has manageable capital spending plans in the coming years. Highlighted current and future capital projects include: (a) renovation of the old emergency department (which currently is vacant) to include pain management, endoscopy, and pulmonary services (approximately $5.5 million); (b) renovation of the 7th floor of the South Tower (approximately $6 million); and (c) longer-term, management is considering expanding physician office space. Management notes that SVHC was an early adopter of an electronic medical record system. SVHC currently does not have new money debt plans through FYE 2015.

Outlook

The stable rating outlook reflects SVHC's distinctly leading market position, continued favorable operating performance with improved results in interim FY 2011, and maintenance of good debt ratios.

WHAT COULD MAKE THE RATING GO UP

Continued growth in patient volumes leading to maintenance of distinctly leading market position; consistent growth in absolute cash flow generation and elevated operating margins leading to stronger debt ratios; materially improved liquidity ratios

WHAT COULD MAKE THE RATING GO DOWN

Material market share loss; sustained decline in operating margins and weakening of debt and liquidity ratios; unanticipated material increase in debt without commensurate increase in cash and cash flow

KEY INDICATORS

Assumptions & Adjustments:

-Based on Stormont-Vail HealthCare, Inc. and Affiliates combined financial statements

-First number reflects audited FY 2010 for the year ended September 30, 2010

-Second number reflects pro forma on unaudited eight months FY 2011 annualized

-Pro forma assumes issuance of Series 2011F fixed rate bonds to refund SVHC's Series 2008E long-term rate mode put bonds and Series 2001K fixed rate bonds, release approximately $4.1 million of DSRF funds currently in place, and provide $10 million to support SVHC's capital plans

-Investment returns reclassified as non-operating and normalized at 6%

*Inpatient admissions: 19,070; 20,165 (based on annualizing eight months FY 2011)

*Total operating revenues: $486 million; $512 million

*Moody's-adjusted net revenues available for debt service: $50.5 million; $69.9 million

*Total debt outstanding: $141.9 million; $147.2 million

*Maximum annual debt service (MADS): $9.6 million; $11.5 million

*MADS Coverage with reported investment income: 4.78 times; 5.22 times

*Moody's-adjusted MADS Coverage with normalized investment income: 5.25 times; 6.07 times

*Debt-to-cash flow: 3.34 times; 2.36 times

*Days cash on hand: 126 days; 135 days

*Cash-to-debt: 110%; 116%

*Operating margin: 2.5%; 5.8%

*Operating cash flow margin: 8.4%; 11.3%

RATED DEBT

Issued through Kansas Development Finance Authority (debt outstanding as of September 30, 2010):

-Series 2008F Fixed Rate Revenue Bonds ($28.0 million outstanding), rated A2

-Series 2008E Long-Term Rate Mode Revenue Bonds ($18.9 million outstanding, initial mandatory put date of November 15, 2011, expected to be refunded by Series 2011F bonds), rated A2

-Series 2007L Fixed Rate Revenue Bonds ($50.1 million outstanding), insured by MBIA, A2 unenhanced rating

-Series 2001K Fixed Rate Revenue Bonds ($40.98 million outstanding, expected to be refunded by Series 2011F bonds), insured by MBIA, A2 unenhanced rating

CONTACTS

Obligor: Kevin Han, CFO, (785) 354-6148

Underwriters: Steve Proeschel, Piper Jaffray, (612) 303-6649; Bill Henderson, Piper Jaffray, (913) 345-3370

PRINCIPAL METHODOLOGY USED

The principal methodology used in this rating was Not-for-Profit Hospitals and Health Systems published in January 2008. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

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 rating are the following: parties involved in the ratings, [and] parties not involved in the ratings, [and] public information, [and] confidential and proprietary Moody's Analytics information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a 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

Mark Pascaris
Analyst
Public Finance Group
Moody's Investors Service

Jennifer Ewing
Backup Analyst
Public Finance Group
Moody's Investors Service

Contacts

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


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

MOODY'S ASSIGNS A2 LONG-TERM RATING TO STORMONT-VAIL HEALTHCARE'S (KS) SERIES 2011F FIXED RATE REVENUE BONDS; A2 PARITY RATING AFFIRMED; OUTLOOK REMAINS STABLE
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