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:

MOODY'S ASSIGNS Aa1/VMIG 1 RATINGS TO IRWD'S BONDS, SERIES 2011A-1 AND 2011A-2, Aa1 RATINGS ON PARITY DEBT AFFIRMED

04 Apr 2011

APPROXIMATELY $357 MILLION OF DEBT AFFECTED, INCLUDING THE CURRENT OFFERING

Irvine Ranch Water District, CA
Water/Sewer
CA

Moody's Rating

ISSUE

RATING

Refunding Series 2011A-1

Aa1/VMIG 1

  Sale Amount

$60,200,000

  Expected Sale Date

04/12/11

  Rating Description

Revenue

 

Refunding Series 2011A-2

Aa1/VMIG 1

  Sale Amount

$40,100,000

  Expected Sale Date

04/12/11

  Rating Description

Revenue

 

Opinion

NEW YORK, Apr 4, 2011 -- Moody's Investor's Service has assigned Aa1/VMIG 1 ratings to Irvine Ranch Water District's Bonds, Refunding Series 2011A-1 and Series 2011B-2. At the same time, we have affirmed our Aa1 rating on the District's outstanding parity debt. The Bonds are secured by a pledge of unlimited property tax assessments (GO) on four improvement districts within the district, and by a senior claim on net revenues of the system on parity with the district's outstanding revenue obligations. Given the varied credit quality of the improvement districts' GO pledges, the long term rating on these bonds is based upon the net revenue pledge.

RATINGS RATIONALE

The long term rating reflects the district's numerous credit strengths including its strong service area, sound operations, and healthy reserves. The district's low revenue debt level also is a key credit factor.

Most of the District's GO debt, including the current issue, is in variable rate mode. Series 2010 Bonds, in the amount of $175 million issued last November is fixed rate as are the district's revenue bonds. The District is currently subsidizing its GO debt with net revenues, suggesting political resistance to raising the property taxes. Still, the substantial amount of property tax that the District could raise and still remain within its target tax rate level mitigates the fundamental risks attendant upon its variable rate debt portfolio. The District's sound liquidity is a positive credit factor in and of itself, and is critical to the current ratings also because it mitigates the district's variable rate debt and swap risks, the risk associated with the concentration among the district's top ratepayers, and the District's reliance upon a variety of non-core activities for a meaningful amount of its revenues. Moody's anticipates that the District will maintain strong reserves, consistent with its past practice and stated intention. Should it not do so, the rating could be subject to downward pressure.

The District has secured its outstanding GO obligations, including the current issue, with unlimited property tax assessments from individual improvement districts within the District. The current issue is secured by a pool of assessments from four of the district's seventeen sewer and sixteen water improvement districts. The four districts securing the current issue, some of which overlap, range in size from 2,330 parcels to 22,392. As there is no common reserve or step-up provision among the districts, the contribution of the GO securities from a credit perspective would be based upon a "weak link" or "modified weak link" analysis. Given the size of the smaller districts, this would not suggest a strong credit profile. The rating on the current issue is, therefore, based upon the enhancement provided by the senior net revenue pledge which also secures the issue.

The VMIG 1 portion of the assigned rating reflects our evaluation of the District's ability to pay the purchase price of tendered bonds in Index Mode from remarketing proceeds The VMIG 1 reflects Moody's approach to rating long-mode put bonds based on likely market access when the district re-offers these SIFMA-based bonds. Our rating reflects our expectation that the District will be able to access the market in a timely manner to finance the tendered bonds given the operational and financial stability of the District, its high Aa1 long-term rating, and its frequency of market participation. Further supporting assignment of the VMIG 1 is the District's strong management and our expectation that the District will take all steps necessary to ensure payment of the tender, including liquidation of reserves in a case where this would be the only near-term option to pay. The District will have a six month window prior to the mandatory tender date, during which it can call for an unscheduled tender. This will afford the district additional flexibility in assuring successful tenders.

USE OF PROCEEDS: Refund a portion of the District's outstanding variable rate debt.

CURRENT OFFERING STRUCTURE: Multi-modal variable rate debt with a mandatory tender on a scheduled tender period termination date. District is irrevocably committed to purchase tendered bonds on the scheduled tender dates from remarketing proceeds and/or its own funds. The Scheduled Mandatory Tender dates will be thirteen months or less. The initial Mandatory Tender Date is expected to be 4/1/12. The District will have the option to use an Unscheduled Mandatory Tender provision beginning six months prior to the scheduled Tender Date. The Mandatory Tenders notwithstanding, the bonds' final maturity date will be October 1, 2037.

LARGE, WEALTHY SERVICE AREA

The District provides water treatment and distribution, and wastewater collection and treatment, to a large, wealthy service area in Orange County. The District's 330,000 resident population is spread over 179 miles reaching from the Pacific coast to the easternmost border of the county. The District includes the entire city of Irvine and all or a portion of the cities of Orange, Costa Mesa, Lake Forest, Tustin, Newport Beach, and portions of unincorporated Orange County. Income levels in the cities served by the district range from slightly above to more than twice the state median. The county as a whole has suffered the effects of the current recession but employment has remained stronger than in surrounding counties. Moody's anticipates that the county will maintain its comparative strength, as and when the economies of the state and nation resume growing.

The District's customer base is fairly diverse, with notable concentration among the top ratepayers. Residential customers accounted for 51% of total operating revenues in fiscal 2010, in line with prior years. Total service connections were 186,856 in 2010, reflecting continued though slowing growth. Connections were roughly evenly divided between water (96,300) and sewer (90,545). The District is somewhat heavily reliant upon its largest customers, particularly the Irvine Company. The ten largest water customers represented 22.1% of water sales revenue in fiscal 2009 and 27.6% in 2010, with various affiliates of the Irvine Company accounting for approximately 15% in both years. The ten largest wastewater customers represented 13.0% of wastewater sales revenue in fiscal 2009 and 15.1% in 2010, with Irvine Company affiliates at about 8% in both years. This concentration is a weakness somewhat mitigated by the long-term strength of the local economy, which is not heavily dependent upon any one sector. The liquidity of the district is also an important mitigant as it would allow the district time to absorb and adjust to any shocks among these large customers.

The district's assessed value (AV) have contracted modestly since 2009. This is more significant for IRWD than a typical water district as most of its outstanding debt consists of improvement district GO bonds rather than revenue bonds. The experiences of different areas within the District varied widely, reflecting their ages, locations and wealth levels.

HEALTHY OPERATIONS; UNUSUAL RELIANCE UPON NON-OPERATING REVENUES

The District's financial operations are sound, supported by healthy liquidity and reserves. The District's liquidity is a key credit strength: net working capital represented 220% and unrestricted reserves 238% of operations and maintenance (O&M) in fiscal 2010. The District has regularly exceeded its informal target of maintaining cash balances approximating 75% of its unhedged variable rate debt, currently outstanding at about $196 million, and expects to continue to do so.

An unusual aspect of the District's operations is its reliance upon revenues from activities not directly related to its primary mission. The District generates substantial revenues in addition to water and sewer service charges. These revenues are effectively used to subsidize rates and keep property assessments low. For fiscal 2010 direct operating expenditures represented 78% and 61% of water and sewer service charges, respectively. However, neither of these expenditure figures include general administration; when that is incorporated, operating revenues cover expenses approximately evenly. Net revenues contributing to debt service are boosted by a variety of additional revenue sources. The district generates revenues from net interest earnings on $690 million of bonds; these self-supporting bonds are secured solely by a trust invested in AIG and Fannie Mae Guaranteed Investment Contracts: bondholders have no recourse to the district. The net interest earnings on these bonds, rental income from two apartment buildings and two office buildings, and interest earnings on the District's investment portfolio, together represented about 14% of gross revenues in fiscal years 2005 through 2008, declining to 9% and 10% in fiscal 2009 and fiscal 2010 respectively. The decline underscores the risk associated with two of these three revenue sources, as they are far more susceptible to market forces and therefore more volatile than essential service revenues. The third, the bond net interest earnings, are predictably declining as the debt is amortized. The District's strong reserve position is an important contributor to credit strength in this case because it is available to replace revenues lost due to market volatility.

WATER SUPPLY SOMEWHAT DEPENDENT UPON CHALLENGING SOURCES; CIP EXPECTED TO BE FUNDED FROM GO DEBT AND PAY-GO

The District's water and sewer systems are both healthy operations, fully compliant with all regulatory requirements and readily able to meet current and anticipated needs. The District's water supply is well suited for its customer base and relatively stable, although the district is not immune from supply challenges affecting all Southern California systems. The District benefits from the availability of groundwater which accounts for approximately 45% of its needs. Imported water from the Metropolitan Water District of Southern California (MWD) provides another approximately 27%. Recycled water from the District's wastewater treatment plants adds another 23%. The total is rounded out by a variety of sources of untreated water. The District expects to increase the availability of recycled water, lessening its dependence upon the other two sources, through expansion of its wastewater treatment plant.

Both groundwater and MWD supplies are subject to the vicissitudes of water availability in Southern California, both meteorological and regulatory. MWD's supplies are currently constrained due to both three years of drought in the state and recent legal decisions which, even in normal precipitation years, will likely reduce the amount of water available from the State Water Project. MWD's allocation of its available supply is based upon a complex formula which now incorporates extraordinary factors associated with its water shortage. Generally as available water decreases MWD increases its rates. The District has regularly increased its rates, and Moody's anticipates the district will continue to incorporate future increased water purchase costs into its rates, preserving its liquidity and debt service coverage levels.

On the sewer side, the District's two treatment plants each are able to treat about 75% of average daily flows. Approximately 71% of the flow is treated and reused by the district, up from 55% just a few years ago. The remainder is sent to the Orange County Sanitation District (OCSD). The district's capital improvement plan includes $51.2 million for expansion of its primary wastewater treatment plant to increase recycled water production and reduce amount sent to OCSD. Moody's observes that this plan adds a minor note of uncertainty to the district's credit profile from the perspective of construction, debt and operations although the district does have a successful record of managing these risks. The District's $419 million capital improvement plan through 2015 is expected to be funded with cash, general obligation bond issuance, and grant funding. Because of its working relationship with the Irvine Company, the primary developer in the region, the district is able to anticipate and plan for any demand-driven expansion in both systems. This expansion is by policy expected to pay for itself through assessments or GO bonds. To the extent that the CIP results in a decrease in the district's reserves, this will be noted as a potentially significant credit negative which could put downward pressure on the district's rating.

DEBT LEVELS LOW, A CREDIT STRENGTH; LEGAL DOCUMENTS PROVIDE SOMEWHAT LIMITED SUPPORT

The district's low revenue debt level is a credit strength. Its $85.1 million bond issued in March 2010 (81.4 million outstanding) is the District's only currently outstanding revenue bond debt. After the current issue the District's parity, senior obligations will consist of the current financing, the March, 2010 financing, November, 2010 financing, a small 1997 state loan, and the letters of credit (LOC) securing the district's variable rate GO debt ($289 million). The District's practice is to pay most of its GO debt service from net revenues in order to keep tax rates low. While this might suggest a reluctance to raise property taxes, the District's adoption of a policy maximum rate significantly above the current level supports our assumption that the District would raise rates if necessary to meet the requirements of its GO debt portfolio. Its substantial liquidity mitigates the risks associated with the letters of credit, as discussed in more depth below.

Coverage of the District's maximum annual debt service on its 2010 revenue bond, 2010 fixed rate GO bonds and the current issue ($37.1 million in 2038) is a sound 1.86x by fiscal 2010 net revenues ($69.0million) Actual coverage on these series is expected to stay well above that level in the coming years as debt service on these series will remain below $27.3 million until 2034. In 2010 the District's total debt service, including subordinate obligations and SWAP payments was $34.7 million. Net revenues of $69.0 million provide a solid 1.99 times coverage. Moody's calculates this figure incorporating the entire debt service amount on the above mentioned series, , excluding the benefits of the Build America Bond subsidy. While this is clearly extremely conservative, it nonetheless is a relevant calculation given that the rating is based entirely upon the strength of the revenue pledge. Moody's notes that the additional bonds test (ABT) allows the district to dilute coverage to 1.25x debt service. Moody's also notes that the definition of "Debt Service" in the current indenture reduces that figure by the amount of anticipated Federal subsidy, and, again more significantly, by the property tax assessments expected to pay the GO obligation on the double-barrel revenue bonds. The District anticipates issuing additional debt approximating $75 million in each of 2012 and 2014, the structure of which has yet to be determined. Were coverage to decline substantially below the current level as we have presented it, there could be downward pressure on the rating.

The assessments from the participating improvement Districts are sent to the Trustee pursuant to the indenture. Net revenues are allocated first to O&M, second to the funding of contingency reserves for O&M, third to debt service as needed, fourth to the reserve fund as needed, and last to the district for its use. The funding of the contingency fund as the second priority is notable, as these reserves are not defined or limited under the documents. The District has not invoked this clause in the past, nor does it intend to do so in the future, so the clause currently poses only a modest risk given the District's strong reserve levels. Similarly, the district's strong credit position mitigates the weakness stemming from the fact that the current issue does not require funding of a debt service reserve.

VARIABLE RATE DEBT AND SWAPS ADD MANAGEABLE RISK

Excluding the District's $175 million fixed rate issue of November, 2010, the District's GO debt portfolio is entirely variable rate. Bond counsel has indicated that with respect to the unlimited property tax pledge there is no distinction between repayment of GO bonds and related bank bonds: the district has the authority to raise ad valorem property tax rates as needed to repay bank bonds in accordance with their terms. The credit risk is therefore short-term: addressing the liquidity demands posed by the variable rate debt and LOCs until the necessary property tax can be levied, or until the bonds can be refunded. Most, though not all, of the district's ten LOCs provide a grace period before term-out begins. So long as the District retains healthy liquidity and a willingness to raise ad valorem assessments as needed, the variable rate exposure in and of itself is not a credit concern.

The District's LOC bank exposure is diversified among three separate banks all rated in the 'Aa' range. Most, though not all, of the district's LOCs offer three or five year term-outs. The District has one LOCs requiring immediate repayment totaling $21.7 million, well within the District's ability to address given its healthy liquidity. A significant number of the LOCs expire in 2011, but the District is well on its way of extending or replacing the LOC's. Following the issuance of the current series, and extension or replacement of the current LOCs, the District's remaining LOCs will expire between December, 2013 and August, 2016

The District's swap portfolio is unusual for a municipal entity in that it does not directly hedge specific outstanding debt issues, but rather provides an economic hedge to the variable rate debt portfolio as a whole. The District has outstanding five separate swaps with two counterparties for notional amounts totaling $130 million. Swap payments, both regular and termination, are subordinate to the parity debt. The option to terminate is triggered if the District is downgraded below A3 or the counterparty below Baa1, among other events. The swaps are split between Merrill Lynch Capital Services Inc. and Citibank NA as counterparties. (The Merrill Lynch Capital Services Inc obligation is guaranteed by Merrill Lynch & Co. Inc. rated A2, negative (multiple) outlook; Citibank NA is rated A1, negative (multiple) outlook).

The as of February 28 the market value of these swaps was $19.8 million in the negative, and the District had to post $4.8 million as collateral, which represents the amount above the $15 million threshold. .

WHAT COULD MOVE THE RATING UP: A formalized commitment to maintain liquidity and unrestricted reserves at or above current levels could contribute to upward pressure, as could a debt structure which preserves strong coverage levels. A return to steady, long-term economic growth also would be a prerequisite for an upward rating movement.

WHAT COULD MOVE THE RATING DOWN: An actual or anticipated deterioration in the District's reserves could put downward pressure on the rating. Diminishing current or projected coverage of direct and "enhanced" parity debt service, individually and combined, also could put downward pressure on the rating. Substantially increased concentration among the top ratepayers could do so too, although to a lesser extent.

KEY STATISTICS

Population served: 330,000

Ten largest water customers as % of water sale revenues, FY 2010: 27.6%

Ten largest wastewater customers as % of wastewater sale revenues, FY 20: 15.10%

Operating ratio, FY 2010: 97.9%

Net take-down, FY 2010: 42.2%

Debt ratio, FY 2010: 30.8%

Net working capital as % of operations and maintenance, FY 2010: 220%

Rate covenant and additional bonds test: 1.25x

Estimated coverage of maximum annual debt service, net revenue obligations, FY 2010: 1.95x

Service area income levels (PCI: 2000 census per capita income, MFI: 2000 census median family income, %: percent of state median):

City of Irvine: PCI 142%, MFI 162%

City of Orange: PCI 107%, MFI 122%

Costa Mesa: PCI 103%, MFI 105%

Lake Forest: NA

Tustin: NA

Newport Beach: PCI 278, MFI 210%

Orange County: PCI 114%, MFI 122%

The principal methodologies used in this rating were Analytical Framework For Water And Sewer System Ratings published in August 1999, and Updated: Sources of Liquidity for Variable Rate Debt Instruments Supported by an Issuer's Own Liquidity published in September 2008.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not 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

Kevork Khrimian
Analyst
Public Finance Group
Moody's Investors Service

Michael Wertz
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 Aa1/VMIG 1 RATINGS TO IRWD'S BONDS, SERIES 2011A-1 AND 2011A-2, Aa1 RATINGS ON PARITY DEBT AFFIRMED
No Related Data.
© 2019 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 ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S 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 RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S 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. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S 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 AND MOODY’S 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 OR MOODY’S 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.

CREDIT RATINGS AND MOODY’S 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 the Moody’s 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 OR 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 rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS 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 rating, agreed to pay to MJKK or MSFJ (as applicable) for 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