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 RATING AND NEGATIVE OUTLOOK TO FLORIDA GOVERNMENTAL UTILITY AUTHORITY'S (FL) UTILITY REFUNDING REVENUE BONDS (LEHIGH UTILITY SYSTEM), SERIES 2010

16 Nov 2010

MOODY'S DOWNGRADES RATING ON $60 MILLION POST-SALE PARITY BONDS OUTSTANDING TO A2 FROM A1 AND ASSIGNS NEGATIVE OUTLOOK

Florida Gov't. Util.Auth.-Lehigh Util.Sys.
Water/Sewer
FL

Moody's Rating

ISSUE

RATING

Utility Refunding Revenue Bonds (Lehigh Utility Systems), Series 2010

A2

  Sale Amount

$12,420,000

  Expected Sale Date

11/30/10

  Rating Description

Water and Sewer Revenue

 

 
Moody's Outlook   Negative
 

Opinion

NEW YORK, Nov 16, 2010 -- Moody's Investors Service has assigned an A2 rating and negative outlook to Florida Governmental Utility Authority's (FL) Utility Refunding Revenue Bonds (Lehigh Utility System), Series 2010. At the same time, Moody's has lowered to A2 from A1 the rating on $60 million outstanding parity system (Lehigh) revenue bonds and assigned a negative outlook. The bonds are secured by a first lien on the net revenues and connection fees of the Lehigh Acres utility system. Bond proceeds will be used to repay a $3.16 million draw on a SunTrust letter of credit and provide $6.58 million in new money for the system's capital program, primarily for a membrane softening facility ($4.6 million) and water distribution projects ($1.1 million). Adequate legal covenants include a fully funded debt service reserve (at lesser of MADS, 125% average debt service or maximum allowed under the Code), a rate covenant at 120% of annual debt service (or 1.1 times without connection fees), and additional bonds test at 120% of MADS (or 1.1 times without connection fees), both on a pledged revenue basis (or 110% on a net revenue basis).

RATING RATIONALE

The A2 rating and downgrade are based on: the weakened financial performance, with reduced debt service coverage, that is not expected to improve notably in the intermediate term; above average debt ratios; and the relatively small size of the system with a service area undergoing severe contraction due to significant foreclosures. Additional credit considerations include the strong cash position and the essential-service nature of the utility. The negative outlook reflects current economic indicators of continuing and significant foreclosure completions and contraction of the customer base but with favorable future growth potential.

SYSTEM TRANSFERRED FROM INVEST0R-OWNED UTILITY TO PUBLIC-OWNED UTILITY IN 2003

Florida Governmental Utility Authority (FGUA) is a legal entity and public body created pursuant to an Interlocal Agreement currently among Polk County, Citrus County, Lee County, Hendry County, DeSoto County and Pasco County. It is managed by a governing board, with board members appointed by each of the local governments party to the Interlocal Agreement. FGUA does not have any employees and operates the system (as one of six separate enterprise utility systems) on a contractual basis. A management agreement with Government Services Group (GSG) provides for management services for a fixed annual fee subject to annual CPI adjustments, expiring September 30, 2014. An operations and billing agreement with Severn Trent Environmental Services, Inc. (STES) provides for basic operations and customer service for a fixed annual fee and expires September 30, 2011. The bond indenture provides for acquisition of the system by Lee County, in exchange for the issuance of a county bond. Also, pursuant to an October 27, 2005 Interlocal Agreement, Lee County has the exclusive right to acquire the Lehigh Acres system. The county has not indicated any plans to acquire the system in the intermediate term.

The system is located in Lee County (Issuer Rating Aa1) which is currently experiencing a very severe housing market correction with an extremely high volume of foreclosed properties and a current (August 2010) unemployment rate of 13.7%. The utility currently serves a small portion of the authorized service area (about 13%) and has experienced declines in customers and debt service coverage, despite rate adjustments.

SYSTEM CAPITAL PLANS DELAYED IN LIGHT OF SEVERELY DEPRESSED ECONOMIC CONDITIONS

The system currently serves about 13% of the authorized service area (100,000 platted lots), with a population of between 27,000 and 30,000. Prior growth had accelerated the need for facility and line expansions from original forecasts. Growth has been managed primarily through developer agreements that required adequate infrastructure to tie into the system at some point. There remains some new residences adjacent to wastewater lines that may tie into the system within the next year. Assuming renewed growth at some level when the area begins to recover from the economic downturn, there exists good area growth potential. Customer counts are down about 7.8% for water and 7.7% for sewer from their 2007 highs and average customer water use is down 13.1% over that same period, indicative of both water restrictions and the struggling economy. The combined system customer base is highly residential (94.8%), with the top 10 customers representing a modest 2.33% of total system sale revenue.

Water accounts are 10,873 in fiscal 2010, a very marginal increase over 10,869 in fiscal 2009. The system's supply is from the surficial Sandstone Aquifer, which has experienced a drop in water level over the last decade. Alternate supply is being considered from a lower more saline (Upper) Floridan Aquifer, from which treatment will require a more costly membrane technology. Withdrawals from the aquifer are regulated by the South Florida Water Management District (SFWMD) through a water use permit (WUP) that expires on December 1, 2014. Permit allows for 3.304 MGD average withdrawal in relation to 4.1 MGD combined plant capacity (3.1 MGD permitted capacity) and 2.111 MGD average (3.771 MGD maximum) demand in 2010. A second 2.5 MGD reverse osmosis (RO) plant, originally expected by the spring of 2010, has been deferred due to depressed economic conditions. An interconnection with Fort Myers provides the system with needed redundancy through a back up supply. Storage at 4.5 MGD is considered to be adequate. Unaccounted for water is about 11.5% and the system is reportedly in compliance with Stage 2 D/DBP requirements. There is also reportedly a regular meter changeout program.

Sewer accounts are 8,807 in fiscal 2010, a marginal increase over 8,794 in fiscal 2009. There are about 160 new customers who are being connected to the wastewater system in the near term which should help stabilize and improve customer counts. The sewer system operates one 2.3 MGD (permitted) wastewater treatment plant in relation to current average usage of 1.974 MGD. Officials are anticipating a plant re-rating to 3.5 MGD after a newly-installed deep well completes the testing period. Effluent is disposed of by rapid infiltration basins (RIBS) with 1.48 MGD average flow, a reuse system (0.7 MGD reserve capacity per agreement), or deep injection wells (DIW). Sludge is dewatered and treated to a Class B product and land applied or may also be disposed of via a Class 1 landfill. There are 103 miles of gravity sewer lines and 64 lift stations. Infiltration/inflow into the system is reported to be less than 10%. There are reportedly no issues related to TMDL's.

HIGH DEBT LEVELS WITH SIGNIFICANTLY REDUCED CAPITAL PROGRAM

The combined utility system has a high 70.1% debt ratio in fiscal 2009 (down from 102.8% in 2004), indicative of initial acquisition costs and sizable upfront infrastructure improvement needs. Pro forma debt ratio, including this issue, increases the debt ratio to about 73.1%. Debt repayment is also structured at a below average pace with about 37% of outstanding bond principal retired within the last 10 years of a 30-year maturity schedule. The current five year (fiscal 2011 to 2015), $13.4 million CIP ($8.4 million for water and $5.0 million for sewer) is expected to be funded 49.1% ($6.6 million) with bond proceeds (current offering), 31.4% ($4.2 million) with Renewal and Replacement funds, 11.4% ($1.5 million) with unexpended bond proceeds and 8.2% ($1.1 million) with connection fees and reserves. The current capital program has been scaled down considerably from the prior $45.7 million (fiscal 2010 to 2014) program. A $36.2 million bank line of credit, on which $3.16 million had been drawn (refinanced with this issue), is being paid off and closed. Operations and debt have been supported by annually-indexed rate increases of 2.1% to 2.9% from fiscal 2005 to fiscal 2008 as well as more recent base rate increases of 7% in fiscal 2009, 6% in fiscal 2010 and a 9% implemented for fiscal 2011. Additional annual rate increases of one percent (except for 3% in fiscal 2013) are suggested through the fiscal 2015 forecast period. Rates are reviewed annually in conjunction with the annual budget. The monthly average residential water and sewer bill of $113.32 (6,000 gals. per month) is well above the $87.63 average for other regional utilities. Total water and sewer connection fees, at $5,535, are also above the $5,049 regional average. Above average rates are balanced against still-reasonable land and housing costs. Rate-setting authority currently lies with the authority. As per the bond indenture, the R&R account is to be funded at 5% of system's gross revenues of the prior fiscal year. All bonded debt is fixed rate with no swaps and no issues related to debt service reserve surety substitutions due to downgraded insurers.

FINANCIAL OPERATIONS NARROWED; RATES ARE HIGH AND RESERVE LEVELS STILL SATISFACTORY

System operations should begin to stabilize in the near term given current and anticipated rate increases and potential sewer tie-ins although operations are expected to remain narrow. Operating ratios have weakened, with the fiscal 2009 operating ratio at 55.8% (56.6% unaudited fiscal 2010) and net take-down 44.2%. Debt service coverage has also dropped in fiscal 2009 to 1.16 times (1.03 times in fiscal 2008) on a net revenue basis and 1.22 times including additonally-pledged impact fees from a high of 1.73 times (net revenue) and 3.13 times (pledged revenues) in fiscal 2005. Fiscal 2008 net revenue declined 11.5% due to reduced revenues associated mainly with the depressed economy, a reduction in interest earnings and an increase in O&M related to contracted service escalator increases and other engineering and legal expenses. Net revenues showed some bounce-back in fiscal 2009 with the aide of a 7% rate increase although a marginal decline is again expected in fiscal 2010 despite a 6% rate increase that year. The utility imposed an inactive account fee in September 2009 which applies base charges to properties for which accounts have been closed producing incremental revenue to help offset operating revenue declines.

Sales revenue is conservatively projected to grow at lower-than-historical rates, in part due to an anticipated reduction in individual flow usage. Debt service coverage for fiscal 2010 is projected to be 1.15 times and 1.19 times on a net revenue and pledged revenue basis respectively. The fiscal 2010, 1.15 times net revenue coverage level meets the 1.10 times net revenue requirement but the pledged revenue (including connection fees) coverage of 1.19 times falls just below the 1.20 times pledge revenue requirement of 1.20 times. Nonetheless the system still meets the rate covenant test since the test is based on passing only one of the two tests.

At the end of fiscal 2010, the system is expected to have $3.1 million in unrestricted cash (including the operating reserve and rate stabilization funds) in relation to $6.5 million in operating expenses - equating to about 174.1 days-in-cash, in relation to the 90-day working capital policy. There is also about $10.3 million in restricted funds represented mostly by bond and bank loan proceeds ($5 million) and impact fees ($2.3 million). Financial operations going forward will be challenged by significant housing inventory and inactive accounts as well as the potential for additional average customer use declines. A new operations contract commencing Oct 1, 2011 is expected to result in lower operating costs and the financial feasibility report assumes a 5% cost reduction.

LEE COUNTY'S CURRENTLY WEAKENED ECONOMY MAINTAINS FAVORABLE LONG-TERM GROWTH PROSPECTS

The Lehigh Utility System serves the Lehigh Acres community, which is a large development within Lee County (Aa1 Issuer Rating) that consists of 100,000 platted lots (60,000 acres) developed in the late 1960's. The county has experienced rapid population growth of 31.6% over the past decade, eight percentage points faster than the state population growth, and another 34.5% between 2000 and 2008 to 593,136. The county's tax base is a still substantial $55.7 billion for fiscal 2011, despite declining 42.3% from the high of $96.5 billion in fiscal 2008 (previously had tripled between fiscal 2002 and fiscal 2008).

Job losses, especially in the construction, real estate and service sector, have increased the county's August 2010 unemployment level to 13.7%, above the 12.4% the state and well-above the 9.5% for the nation, but similar to the county's 13.5% of August 2009. Top employers are mostly institutional, including Lee County School Board and Lee Memorial Health Systems. Wealth levels are slightly above the state averages, with per capita income at 113.8% of the state level. The entire Cape Coral-Fort Myers area, in which the utility is located, is experiencing severe economic constriction with some of the highest foreclosure rates in the country. According to Moody's Economy.com (July 2010) the Cape Coral-Fort Myers recovery will sputter along for the rest of 2010. The housing correction will remain a serious weight on the economy and CCF will suffer from one of the highest foreclosure rates in the nation. Subdued job growth can be expected until 2011, as consumer-driven industries will have to cope with weak demand induced by troubled consumer balance sheets. Although the metro area will lag the nation in the early part of the recovery, its longer-run outlook is much more favorable. Job growth will outpace the national average, as the desirable coastal location attracts migrants.

Outlook

Outlook:

The negative outlook is based on the still-continuing area foreclosure activity and appreciable number of inactive accounts but with favorable overall growth potential.

What Could Make the Rating Go UP:

- Improved debt service coverage and liquidity

- Significantly improved economy

What Could Make the Rating Go DOWN:

- Continued declines in cash and debt service coverage

- Further economic decline

KEY STATISTICS

Pledged revenues: Net water and sewer system revenues and connection fees

Water System:

Number of customer accounts: 10,873

Average usage / plant capacity: 2.1 MGD / 3.3 MGD (permitted)

Sewer System:

Number of customer accounts: 8,807

Average usage / plant capacity: 1.974 MGD / 2.3 MGD (permitted)

Combined System, FY 2009 Operations:

Operating ratio: 55.8%

Debt ratio: 70.1%

Debt service coverage,

By net revenues: 1.16 times

By pledged revenues: 1.22 times

Bonds Outstanding: $72.5 million

Bond Payout,

10 years: 24.4%

20 years: 63.1%

30 years: 100.0%

1999 Lee County PCI (% of State): 113.8%

1999 Lee County MFI (% of State): 101.8%

Unemployment Rate (County), August 2010: 13.7% (12.4% State; 9.5% U.S.)

RATING METHODOLOGY

The principal methodology used in rating Florida Governmental Utility Authority was Analytical Framework for Water and Sewer System Ratings rating methodology published in August 1999. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings and public 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

John Incorvaia
Analyst
Public Finance Group
Moody's Investors Service

Susan Kendall
Backup Analyst
Public Finance Group
Moody's Investors Service

Julie Beglin
Senior Credit Officer
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

MOODY'S ASSIGNS A2 RATING AND NEGATIVE OUTLOOK TO FLORIDA GOVERNMENTAL UTILITY AUTHORITY'S (FL) UTILITY REFUNDING REVENUE BONDS (LEHIGH UTILITY SYSTEM), SERIES 2010
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