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 Aa3 RATING TO PROMEDICA HEALTH SYSTEM'S (OH) $387 MILLION OF SERIES 2011A&B BONDS; OUTLOOK IS STABLE

17 Dec 2010

Aa3 RATING ASSIGNED TO SERIES 2005B, 1996, 1999, 1999A AND 2008D BONDS; SYSTEM WILL HAVE TOTAL OF $500 MILLION IN RATED DEBT

Lucas (County of) OH
Health Care-Hospital
OH

Moody's Rating

ISSUE

RATING

Series 2011A Revenue Bonds

Aa3

  Sale Amount

$357,525,000

  Expected Sale Date

01/06/11

  Rating Description

Healthcare Revenue

 

Series 2011B Revenue Bonds

Aa3

  Sale Amount

$28,665,000

  Expected Sale Date

01/06/11

  Rating Description

Healthcare Revenue

 

 
Moody's Outlook   Stable
 

Opinion

NEW YORK, Dec 17, 2010 -- Moody's Investors Service has assigned Aa3 ratings to ProMedica Health System's (ProMedica) Series 2011A and 2011B fixed rate bonds to be issued through the County of Lucas, Ohio ($358 million) and the County of Lenawee Hospital Finance Authority, Michigan ($29 million), respectively. We are also assigning retroactively underlying Aa3 ratings to the Series 2008D, Series 1996, Series 1999, Series 1999A, Series 2005B fixed rate bonds. The Aa3 rating on existing debt is affirmed at this time as listed at the end of this report. The rating outlook is stable.

RATINGS RATIONALE

The Aa3 rating is based on ProMedica's position as the leading healthcare system in the Toledo region, the system's integration strategy which includes a large health plan and employed physician base, strong liquidity, modest debt level and conservative debt structure. Additionally, the Aa3 rating incorporates competition from a sizable health system, weakness in demographic characteristics and margins that have been below similarly-rated peers.

USE OF PROCEEDS: Refund some or all of Series 2008B&C, Series 1999, and Series 1999A bonds and provide funds for capital projects.

LEGAL SECURITY: The obligated group consists of The Toledo Hospital, Flower Hospital, ProMedica Continuing Care Services Corp., Bay Park Community Hospital, Defiance Hospital Inc., Fostoria Hospital Association, ProMedica North Region, Emma L. Bixby Medical Center, Herrick Memorial Hospital Inc., Lenawee Long Term Care and, most recently, St. Luke's Hospital. The system's foundations are not obligated on the bonds; however, we believe the availability of foundation monies has been demonstrated through the significant contributions made by the foundations to the system's projects and so we have included the foundations' unrestricted investments in our credit assessment. Security is a gross revenue pledge; negative lien covenant. Additional indebtedness tests are standard. Debt service coverage ratio of 1.10 times; if failed, a consultant is to be retained.

INTEREST RATE DERIVATIVES: ProMedica has a limited derivative program. The system has a variable-to-fixed interest rate swap with a notional amount of $62.5 million associated with Series 2008A bonds. ProMedica pays the counterparty a fixed rate of 3.643% in association with this swap. The system has two other variable-to-fixed interest rate swaps for a total notional amount of $11 million; the fixed rates range between 5.7% and 5.8% on these swaps. Given ProMedica's limited program and very strong cash position, we believe any risks associated with termination or posting collateral are minimal. ProMedica has not had to post collateral on the swaps.

STRENGTHS

*Leading market position in a service area that includes the Toledo, Ohio metropolitan area and the surrounding counties with 42% total market share

*Successful strategy as an integrated delivery system that includes a health plan and a large employed and affiliated physician group, which has provided stability in patient encounters and ability to achieve improvement in quality outcomes and access

*Consistent growth in absolute operating cashflow and ability to sustain improved margin levels for the last several years

*Very strong liquidity with 333 days of cash on hand as of September 30, 2010, providing an excellent 236% coverage of proforma debt; asset allocation is relatively conservative with 52% allocated to fixed income securities or cash and virtually all unrestricted investments can be liquidated within a month

*Manageable debt level after current financing, which increases debt by 28%, resulting in very good proforma peak debt service coverage of 6.4 times and favorably low proforma debt-to-cashflow of 2.7 times based on annualized nine-month results for fiscal year 2010

*Current restructuring largely reduces variable rate debt and put risk, resulting in only 11% variable rate debt

CHALLENGES

*Presence of a sizable competitor, whose hospitals are members of a larger statewide system with good financial resources, and currently limited differentiation between services provided at each system's flagship hospital

*Historical margins have been below similarly-rated peer systems, which we believe is primarily driven by the large scope and comparatively slimmer margins or subsidies associated with the health plan, physician group, and a more competitive marketplace

*Capital spending will increase over the next several years to 2-3 times depreciation (compared with an average of 1.5 times for the last several years)

*Managing and funding growth strategies while at least maintaining margins; strategies include the acquisition of physician groups, further physician employment and selective partnerships with other hospitals, including the recently completed transaction with St. Luke's Hospital, which is moderately dilutive to operating margins

*Generally flat or declining volume trends over the last several years as a result of stagnant to slowly declining population trends

MARKET/COMPETITIVE POSITION: SUCCESSFUL INTEGRATED DELIVERY MODEL

ProMedica continues to maintain a strong market position overall, supported by its integrated system strategy. ProMedica Health System includes eleven owned and affiliated acute care facilities, a large health plan with 195,000 members that operates as Paramount, and over 240 employed physicians. ProMedica's largest hospitals are Toledo Hospital with 29,000 admissions and Flower Hospital with 10,000 admissions. The system's Toledo Metro market share (defined as Lucas (OH) County, and adjacent parts of Wood (OH), Fulton (OH) and Monroe (MI) counties) has remained relatively stable over the last 3 years at 42%, compared with 35% for Mercy Health Partners (part of A1-rated Catholic Healthcare Partners), 10% for University of Toledo Medical Center and 10% for St. Luke's Hospital. Market share for heart services is close between ProMedica and Mercy with Mercy gaining a slight lead (37.6%) over ProMedica (35.6%) following the opening of Mercy's new heart center.

We believe ProMedica's strategy to operate as an integrated delivery system, including closely aligning with physicians through employment and selectively growing Paramount's insurance business provides greater stability in the market and positions ProMedica well for sustaining financial performance as well as recruiting physicians. The system's disciplined growth strategies have primarily focused on organic growth with investments in facilities at the larger campuses, the continued development of an orthopedic facility in Wildwood as well as a focus on developing several other institutes and centers of excellence in the future. In the future, and under the leadership of a new Chief Executive Officer, the system will likely focus on acquisition of physician groups and selective acquisition or partnerships with other hospitals. Additionally, the system has a new academic affiliation with the University of Toledo which will allow expansion of residency programs under the management of the University.

ProMedica recently completed a joinder transaction with St. Luke's Hospital in the suburbs of Toledo. Over the longer term, we believe this transaction will enhance the system. In the short-term the transaction will be moderately dilutive to ProMedica's operating margins given large operating losses at St. Luke's that will need to be addressed.

ProMedica's expansion strategies are particularly important to address the challenging demographics of its service area. The population of the Toledo area is stagnant to slowly declining over a number of years with a 1% decline in 2009. Unemployment was above national levels at 12.1% in April 2010. This trend has affected ProMedica's volumes with the system's admissions fairly flat over the last six years (increasing or declining on average 1-2% annually). Through nine months of 2010, acute discharges are down 0.6% (including one month of St. Luke's) and outpatient surgeries are flat, reflecting the affect of the economy in the area. As the largest employer in the area as both a provider and insurer, ProMedica is more susceptible to weakness in the local economy.

OPERATING PERFORMANCE: CONSISTENT GROWTH IN CASHFLOW DRIVING SUSTAINED MARGINS

ProMedica has consistently grown absolute operating cashflow and maintained improved margins for several years. We believe operating margins are somewhat suppressed because of the scope of Paramount and comparatively lower margins and because of subsidies for physicians, although the high degree of integration influences margins at individual business units.

In fiscal year 2009 ProMedica reported $57 million (3.5%) in operating income, compared with $52 million (3.4% margin) in 2008. Operating cashflow grew to $153 million (9.5%) in 2009, compared with $145 million (9.5%) in 2008. The system exceeded its budget. Revenue grew a solid 6%, even with flat inpatient volumes, due to growth in outpatient visits and surgeries and growth in physicians. ProMedica's hospitals were all profitable in 2009. Paramount's operating performance was breakeven due to growth in Medicaid business, declines in HMO membership and several non-recurring writedowns. Subsidies related to the physician group grew in 2009, reflecting several recent acquisitions of physician groups, including a 30-physician cardiology group.

Through nine months of fiscal year 2010, the system is on track to meet its full year budget, which indicates performance on par with fiscal year 2009 (prior to the transaction with St. Luke's). Through nine months of fiscal year 2010, operating income was $51 million (4.1%), compared with $48 million (4.0%) in the prior year. Operating cashflow was $123 million (9.9%), compared with $121 million (10.1%) in the prior year. Total revenue growth excluding one month of St. Luke's results was approximately 5%, which is an improvement over growth in the first half of the year, although below budget given volume softness and unfavorable changes in the mix of business at the health plan. ProMedica has been managing revenue pressures with cost reductions in staffing and supplies areas. We believe the system's greatest operating challenges are continuing to manage expenses, including rising bad debt and charity care (which may be starting to moderate) as well as investments in physician strategies, to offset what is likely to be moderate volume growth because of population trends. Additionally, the addition of St. Luke's, which had a $15 million operating loss in fiscal year 2009, will reduce margins. Given ProMedica's track record of operating performance and managing transactions such as this, we believe the system will be able to improve operating performance at St. Luke's but the timing of the turnaround is unclear at this time.

ProMedica's improved operating performance and manageable debt level (discussed below) result in a strong proforma peak debt service coverage of 6.4 times based on annualized 9 months of fiscal year 2010 and a favorably low 2.7 times debt-to-cashflow.

BALANCE SHEET PROFILE: VERY STRONG BALANCE SHEET WITH EXCELLENT LIQUIDITY AND MANAGEABLE DEBT LEVEL

We believe ProMedica's very strong balance sheet will be maintained based on the system's conservative approach to managing investments and its debt structure as well as balanced approach to financing capital. As of December 31, 2009, ProMedica had $1.2 billion of unrestricted cash and investments (including unrestricted cash at its foundation), equating to a strong 296 days of cash on hand. Cash increased notably in 2009 from $968 million (252 days) as of fiscal yearend 2008 due to a significant reduction in capital spending, strong operating performance, and favorable investment returns. As of September 30, 2010 unrestricted cash grew to $1.4 billion (a very strong 333 days cash on hand). ProMedica's investments are well diversified among types of assets and managers. ProMedica's overall asset allocation is relatively conservative with 52% fixed income or cash and virtually all of the unrestricted cash is available on a monthly basis. On a proforma basis, cash provides an exceptional 236% coverage of debt based on September 30, 2010.

Following a slowdown in capital spending in 2009 to preserve liquidity, ProMedica's spending will increase notably over the next several years. In fiscal year 2009, the system spent $40 million, compared with a budget of $153 million. In fiscal year 2010, the system approved to spend about $330 million, but in the past the system has typically spent less than its approved budget and has spent approximately $150 million to date. Projects include finishing the expansion on the Wildwood campus, information technology initiatives, deferred capital from 2009, possibly funding some projects at St. Luke's and service line expansion. Recent capital spending projections are higher than earlier in the year, reflecting spending levels averaging 2-3 times depreciation (compared to an average of 1.5 times the last several years). Capital spending for fiscal year 2011 is budgeted at $281 million and fiscal year 2012 at $199 million. Funding is expected from the current bond issuance and cashflow .

Following the current financing, ProMedica's total debt will increase by 28% or approximately $127 million. The overall debt structure will improve, virtually eliminating put risk. The system will have 11% variable rate debt (compared with 32% previously).

Outlook

The stable outlook reflects our belief that ProMedica will at least maintain current margins, continue to have strong liquidity levels, and issue a moderate amount of debt over the next several years.

What could change the rating-UP

Stronger and sustained operating margins and notable market share gains and consistently stable or growing volumes, to compensate for a challenging demographic profile and the presence of competition

What could change the rating-DOWN

Multiple years of declining absolute operating cashflow levels, sustained lower margins, large decrease in unrestricted cash, prolonged volume declines or market share erosion, sizable debt issue

KEY INDICATORS

Assumptions & Adjustments:

-Based on financial statements for ProMedica Health System

-First number reflects audit year ended December 31, 2009

-Second number reflects unaudited nine month results ended September 30, 2010, annualized and proforma with approximately $127 million of new debt

-Investment returns smoothed at 6% unless otherwise noted

*Inpatient admissions: 52,528: 59,439 (annualized)

*Total operating revenues: $1.6 billion; $1.7 billion

*Moody's-adjusted net revenue available for debt service: $222 million; $242 million

*Total debt outstanding: $447 million; $584 million

*Maximum annual debt service (MADS): $33.2 million; $37.8 million

*Moody's-adjusted MADS coverage: 6.7 times; 6.4 times

*Debt-to-cash flow: 2.2 times; 2.7 times

*Days cash on hand: 296 days; 333 days

*Cash-to-debt: 269%; 236%

*Operating margin: 3.5%; 4.1%

*Operating cash flow margin: 9.5%; 9.9%

RATED DEBT

-Series 2004 (St. Luke's Hospital; $6.8 million) fixed rate bonds: Aa3 (Effective September 1, 2010, St. Luke's Hospital became a member of ProMedica Healthcare Obligated Group, changing the security for St. Luke's bonds to that of ProMedica's obligated group)

-Series 1996 ($7.6 million) fixed rate bonds: Aa3, insured by MBIA

-Series 1999 ($169.8 million) (to be refunded), Series 1999A ($10.9 million) (to be refunded) and 2005B ($42.2 million) fixed rate bonds: Aa3, insured by Ambac

-Series 2008A,B&C ($132 million) variable rate bonds supported by letters of credit from UBS (Series 2008B&C to be refunded): Aa3 underlying rating

-Series 2008D ($53 million) fixed rate bonds: Aa3

CONTACTS

Issuer: Kathleen Hanley, Chief Financial Officer, ProMedica Health System, 419-469-3832; Susan Payden, Vice President, Corporate Treasury, ProMedica Health System, 419-469-3672

Financial Advisor: Jim Blake, Kaufman Hall, 847-441-8780; Betty Lam, Kaufman Hall, 847-441-8780

Underwriters: James Kim, Barclays Capital, 310-481-4924; Pat Sheehan, Wells Fargo Securities, 212-214-6554

The last rating action with respect to ProMedica Health System was on August 13, 2010, when the Aa3 rating was affirmed and stable outlook maintained.

The principal methodology used in this rating was Not-for-Profit Hospitals and Health Systems published in January 2008.

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.

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

Lisa Martin
Analyst
Public Finance Group
Moody's Investors Service

Sarah A. Vennekotter
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 Aa3 RATING TO PROMEDICA HEALTH SYSTEM'S (OH) $387 MILLION OF SERIES 2011A&B BONDS; OUTLOOK IS STABLE
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