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 TO ROWAN UNIVERSITY'S (NJ) $32.5 MILLION OF REVENUE REFUNDING BONDS, SERIES 2011; OUTLOOK IS STABLE

03 May 2011

UNIVERSITY WILL HAVE $432.9 MILLION OF RATED DEBT OUTSTANDING, INCLUDING THE CURRENT ISSUE

New Jersey Educational Facilities Authority
Higher Education
NJ

Moody's Rating

ISSUE

RATING

Revenue Refunding Bonds, Series 2011

A2

  Sale Amount

$32,465,000

  Expected Sale Date

04/29/11

  Rating Description

Public University Revenue

 

 
Moody's Outlook   Stable
 

Opinion

NEW YORK, May 3, 2011 -- Moody's Investors Service has assigned the long-term A2 rating to Rowan University's (NJ) $32.4 million of Revenue Refunding Bonds, Series 2011 issued through the New Jersey Educational Facilities Authority. The rating outlook is stable. At this time, Moody's has also affirmed the ratings on parity debt obligations, as detailed in the Rated Debt section of this report.

SUMMARY RATING RATIONALE

The A2 rating reflects the University's market position with healthy student demand, balanced operating performance that has been aided through continued growth in net tuition revenue offset by a weak balance sheet cushion for debt and operations, debt service consuming a large portion of the budget, pressure on state funding, and challenges associated with opening and operating a medical school.

STRENGTHS

*Healthy student demand and market position in Glassboro, New Jersey as evidenced by fall 2010 full-time equivalent (FTE) enrollment of 9,710 students and increasing student demand seen through a surge in fall 2010 applications to approximately 8,700 while maintaining a solid yield on admitted students of 31% and selectivity of 56%. Student demand continues to improve for fall 2011 as evidenced by increases in applications.

*Positive operating performance, despite a challenging state funding environment, with three-year average operating margin of 4.3%, as calculated by Moody's, from fiscal year (FY) 2008-2010, providing 2.4 times average debt service over the same time period.

*Healthy generation of operating cash flow margins of 26% and 14% in FY 2010 and FY 2009, respectively.

*State support for new medical school as evidenced by the allocation and receipt of $15.6 million in appropriations for debt service from FY 2009 and FY 2010.

CHALLENGES

*High balance sheet and operating leverage, with debt service consuming a large (12.2% peak debt service to current operations) portion of the budget. Offsetting the high debt service is the University's increased cash flow to cover debt service, with FY 2010 annual debt service coverage of 2.4 times. Maximum annual debt service (MADS) of $35.9 million will be reached in 2012 and after that remains relatively flat and elevated through 2027 when it begins to decline.

*Balance sheet provides a weak cushion for debt and operations, highlighting the University's leveraged position. At the end of FY 2010, financial resources totaled $243.7 million, of which $126.1 million was expendable. Expendable resources cover pro-forma debt by 0.3 times and operations by 0.6 times.

*Operational challenge of opening and operating a medical school that is a new undertaking for the University and reliant on state support to provide critical funding for the program and new facility, with funding subject to annual approval and therefore vulnerable to reductions in a fiscally challenging year.

*Reductions in state funding with future State budget cycles expected to remain difficult. The University is reliant on the State to pay debt service for the new medical school building, subject to annual appropriation, which may face pressure. Total debt service is estimated at approximately $35 million annually. However, the University maintains tuition pricing flexibility to offset decreases in state funding.

*Ability to absorb future borrowing without affecting credit quality will depend upon the University's ongoing ability to generate operating cash flow to support debt service.

DETAILED CREDIT DISCUSSION

USE OF PROCEEDS: Proceeds from the Series 2011 bonds will be used to refund the outstanding balance of the Series 2001C bonds and fund costs associated with issuance.

LEGAL SECURITY: The bonds constitute a general obligation of the University, payable from any legally available funds. The bonds are on parity with other outstanding debt obligations.

DEBT STRUCTURE: All of the University's debt is fixed rate.

INTEREST RATE DERIVATIVES: None.

MARKET POSITION: SOLID MARKET POSITION AS REGIONAL NEW JERSEY PUBLIC INSTITUTION WITH INCREASING DEMAND

Moody's expects Rowan to maintain healthy student demand and a stable market position as a regional public institution located in Glassboro, New Jersey with fall 2010 FTE of 9,710 students. Rowan has shown some fluctuations in selectivity in admissions, with a fall 2010 acceptance rate of 56% compared to 46% in 2006 and yield on accepted students of 31% has remained relatively level. While strong competition will remain, Moody's believes that the University will be able to maintain its market position due to the strong demand of New Jersey high school graduates and its academic programs.

Rowan benefits from the still healthy demographics in the Aa2-rated State of New Jersey, and as a result, enjoys a fair degree of tuition pricing flexibility which should help to support rising debt service requirements. The University looks to grow enrollment moderately through improved retention and improving the quality of entering classes. Net tuition per student trend remains healthy, growing 7% in FY 2010 to $9,710 over the previous year. Continued growth in net tuition revenue will be necessary in order for Rowan to continue supporting its high debt service requirements, which comprise 12.2% of operations.

In June 2009, the Governor of New Jersey signed a Reorganization Plan which provided for the transfer of specific functions and resources used by Robert Wood Johnson Medical School (RWJMS) of the University of Medicine and Dentistry (UMDNJ; rated Baa1/Negative) to Rowan. The Plan authorized a phase out of the Robert Wood Johnson Medical School as part of UMDNJ's larger system, and approved the establishment of a medical school at Rowan University. The Plan also authorized the reallocation of funds (subject to annual appropriations) from UMDNJ to Rowan.

Rowan and Cooper Health System (Baa3/Stable) have entered into an agreement to establish a new four-year school in Camden, New Jersey. The Cooper Medical School of Rowan University is expecting its first class of 50 graduate students in fall 2012, with the program planned to ultimately reach full enrollment of 400 students across each year. In accordance with the Reorganization Plan, the University has received $15.6 million in appropriations from the State in FY 2010 for the Medical School Project. This amount represents FY 2009 and FY 2010 appropriations and will either be applied to fund the costs of construction of the Medical School or be used for the payment of debt service on the Series bonds. The University also expects to receive a grant from the New Jersey Economic Development Authority in the amount of $9 million which will be used to fund construction costs.

Additionally, the State has included in its FY 2011 budget $18.4 million for project implementation support ($7.8 million) and operating support ($10.6 million). The Reorganization Plan calls for the University to continue receiving this support on an annual basis. Upon completion of the phase out of UMDNJ operations at RWJMS-Camden and thereafter, the Reorganization Plan directs $9.44 million annually to the University for faculty support, campus administration and security expenses. While the University is confident these funds will be received each year as the State is committed to the project, the funds are subject to annual appropriation from the State Legislature. In addition to funding provided under the Reorganization Plan, the Affiliation Agreement between the University and Cooper Health System sets forth unrestricted operating support from Cooper in FY 2011-2014 averaging $4.5 million per year. While it is expected for the University to receive support from both the State and Cooper, the sole responsibility for all operating and capital costs associated with the Medical School rests with the University.

OPERATING PERFORMANCE: BALANCED OPERATING PERFORMANCE PROVIDES ADEQUATE DEBT SERVICE COVERAGE

Rowan's average operating margin of 4.3% from FY 2008-2010, as calculated by Moody's, provides average debt service coverage of 2.4 times over the same period. Incorporated into and elevating operating revenues is the $15.6 million of additional appropriations from the State for the Medical School Project. While total operating revenues are elevated, the University has experienced healthy growth in net tuition revenue. Moody's expects this healthy cash flow to continue based on ongoing tuition increases.

Rowan has a moderately diverse revenue stream with 52% of operating revenues generated from net tuition and fees. This amount has steadily increased as state appropriations (32%) have decreased since over the years. Moody's expects that the University will be able to continue to grow student tuition and fees from good demand and increases in tuition and fees in order to support rising debt service. Based on FY 2011 performance, we expect FY 2011 operating performance to remain similar to FY 2010.

The University's primary operating challenge remains its high debt service costs. While operating performance has been strong and expected to remain favorable, much of the surpluses will be consumed by debt service. Annual debt service represents an elevated 12.2% of FY 2010 operations, substantially greater than comparably rated institutions. While Moody's recognizes the strengths of the University's operations and level debt service payments as well as the $7.8 million appropriation from the State to be used to fully fund debt service on the Series 2010 bonds, the University's current debt service burden continues to necessitate uncommonly strong cash flow from operations in order to sustain coverage. Maximum annual debt service (MADS) is a high $35.9 million which will be reached in 2012 and remains relatively flat and elevated through 2027 when it begins to decline. This underscores the critical need to grow net tuition revenues and to carefully manage operating expenses to produce strong operating performance and cash flow.

The State's ability to fund higher education also remains a credit challenge. Rowan's FY 2010 operating budget appropriations from the State decreased to $33.5 million from $40.6 million in FY 2006, or 17.5%. To bridge the loss in funding, Rowan and its in-state sister institutions, will continue to use combine strategies of reducing costs and enhancing revenues, such as through tuition, to meet the challenges of reduced state appropriations. A future concern will be the ability of the State to continue to fund the pension and OPEB liabilities on behalf of the University, as any shifting of state obligations to the University will strain operations already highly leveraged debt service burden.

Moody's recently downgraded the State of New Jersey's general obligation rating to Aa3 with a stable outlook from Aa2 with a negative outlook reflecting a weakened financial position and the expectation that recovery will be unlikely in the medium-term due to rapidly rising fixed costs, relatively slow economic recovery, and a lack of specified plans to rebuild fund balances. The Aa3 rating also incorporates the state's broad, diverse economy and high resident wealth levels, as well as the governor's broad powers to reduce expenditures, which were implemented most recently in the 2011 budget. For more information on the State of New Jersey, please refer to Moody's report dated April 27, 2011.

BALANCE SHEET POSITION: EXPENDABLE RESERVES PROVIDE LIMITED DEBT AND OPERATING CUSHION

While the University maintains a solid financial resource base of $234.7 million, almost half is permanently restricted through a $100 million gift designated as permanently restricted given by Henry Rowan in the early 1990's. At the end of FY 2010, expendable financial resources were $126 million, covering pro-forma debt a thin 0.3 times and operations by 0.6 times. We note that liquidity for the University is good, with $91.5 million of monthly liquidity which translates into 173 monthly days cash. It is important for the University to maintain liquidity to support the rating with the high balance sheet and operating leverage.

The University's potential debt plans over the medium-term could entail borrowing for additional student housing or renovations to academic facilities in Camden. The plans have not yet materialized and the size and structure are not yet known. At the current rating level, Moody's believes Rowan maintains extremely limited capacity to absorb future borrowing without affecting its credit quality. Any impact of additional borrowing will depend upon its ongoing ability to generate strong operating cash flow and to moderately grow expendable financial resources to improve the cushion of resources to debt.

The University's long-standing president, Dr. Donald J. Farish, will be stepping down in June 2011 to assume the responsibilities of President of Roger Williams University (Briston, RI). The Board has enlisted the assistance of an executive search firm that will conduct a national search for the next president with an anticipated start date beginning in July 2012. The Provost, Dr. Ali Houshmand, has been named interim President.

Outlook

The stable outlook reflects Moody's belief that while operating performance remains consistent and the University maintains strong demand and enrollment, escalating debt service payments and a history of substantial borrowing coupled with a very challenging state funding environment place pressure on the rating.

WHAT COULD CHANGE THE RATING UP

Ability to sustain strong operating performance to facilitate growth in financial resources and liquidity; gradually reducing very high leverage; limited borrowing plans

WHAT COULD CHANGE THE RATING DOWN

Additional borrowing plans without commensurate growth in financial resources; pressure on market position and net tuition revenue; significant declines in State support for operating or debt service payments

KEY INDICATORS (Fiscal year 2010 financial data, fall 2010 enrollment data):

Total Enrollment: 9,710 full-time equivalent students

Total Pro-Forma Rated Debt: $432.9 million (Moody's Rated)

Expendable Resources to Pro-Forma Debt: 0.3 times

Expendable Resources to Operations: 0.6 times

Average Operating Margin: 4.3%

Average Debt Service Coverage: 2.4 times

Monthly Liquidity: $ 91.5 million

Monthly Days Cash on Hand (unrestricted funds available within 1 month divided by operating expenses excluding depreciation, divided by 365 days): 173 days

Percent of Revenues from State Appropriations: 32%

State General Obligation Rating: Aa3 with a Stable outlook

RATED DEBT

Series 2000B, Series 2001B, Series 2001C, Series 2002K, Series 2003I, Series 2007B: rated A2; insured by FGIC

Series 2004C, Series 2006G: rated A2; insured by MBIA

Series 2005D: rated A2; insured by Ambac

Series 2008B: rated A2; insured by Assured

Series 2010, Series 2011: rated A2

CONTACTS

University: Richard Hale, Vice P President of Administration and Finance, 856-256-4144

University: Joseph F. Scully, Associate Vice President of Administration and Finance, 856-256-4127

NJEFA: Jennifer Soyka, Project Manager, 609-987-0880

PRINCIPAL METHODOLOGY USED

The principal methodology used in this rating was Methodology for Rating Public Universities published in November 2006.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and

confidential and proprietary Moody's Analytics 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

Leah Ploussiou-Chatzigiannis
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

MOODY'S ASSIGNS A2 RATING TO ROWAN UNIVERSITY'S (NJ) $32.5 MILLION OF REVENUE REFUNDING BONDS, SERIES 2011; OUTLOOK IS 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