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 Aa3 RATING TO STATE OF MICHIGAN'S PLANNED ISSUANCE OF APPROXIMATELY $670 MILLION OF STATE BUILDING AUTHORITY BONDS IN FOUR SERIES

28 Jun 2011

STATE'S RATINGS AND STABLE OUTLOOK ARE AFFIRMED, AFFECTING $1.7 BILLION OF GENERAL OBLIGATION BONDS AND $3 BILLION OF STATE BUILDING AUTHORITY DEBT

Michigan (State of)
State
MI

Moody's Rating

ISSUE

RATING

2011 Revenue and Revenue Refunding Bonds, Series I-A (Facilities Program)

Aa3

  Sale Amount

$430,000,000

  Expected Sale Date

07/12/11

  Rating Description

Lease Rental

 

2011 Revenue and Revenue Refunding Bonds, Series II-A (Facilities Program)

Aa3

  Sale Amount

$155,000,000

  Expected Sale Date

07/12/11

  Rating Description

Lease Rental

 

2011 Federally Taxable Revenue Bonds, Series I-B (Facilities Program)

Aa3

  Sale Amount

$37,000,000

  Expected Sale Date

07/12/11

  Rating Description

Lease Rental

 

2011 Variable Rate Revenue Refunding Bonds, Series II-B (Facilities Program)

Aa3

  Sale Amount

$47,000,000

  Expected Sale Date

07/27/11

  Rating Description

Lease Rental

 

Opinion

NEW YORK, Jun 28, 2011 -- Moody's Investors Service has assigned Aa3 ratings to the State of Michigan's planned issuance of approximately $670 million of bonds in four series through the Michigan State Building Authority (SBA). The issues will refund outstanding authority debt and provide $257 million for new state governmental and educational facility projects. The Series II-B bonds will be issued as variable-rate debt backed by an irrevocable, direct-pay letter of credit. The three fixed-rate series -- Series I-A, Series I-B and Series II-A -- are expected to be priced on July 12, and the variable-rate series on July 27. In connection with this action, Moody's has affirmed the state's general obligation (G.O.) bond rating at Aa2, with a stable outlook that also applies to SBA debt. Ratings on certain related issues (including A1 ratings assigned to SBA equipment lease-backed debt and to the state's lease debt sold through the Michigan Strategic Fund), also have been affirmed.

Ratings Rationale

Michigan in recent years has kept a comparatively strong financial profile, despite having suffered the heaviest economic pressures in the nation. Its G.O. rating is lower than most other states' because of its vulnerability to the domestic automotive industry's restructuring during the past decade. Michigan has shown strong management by keeping available fund balances positive on a GAAP basis, despite its economic challenges, and the state is now on track to rebuild its financial reserves. The Michigan-based U.S. auto industry appears to be stabilizing, because of emergency federal loans, industry cost-cutting efforts and the nation's recovery from the 2007-2009 recession. The state has maintained a low net tax-supported debt burden and adequate pension funding. To be sure, large challenges persist, including the need to manage local units hardest hit by economic and demographic contraction. Municipalities such as Detroit (rated Ba3, negative outlook) may impose fiscal burdens, but we believe the state will manage these challenges appropriately. The rating assigned to the SBA bonds is one notch below the state's Aa2 rating because of the need for annual legislative appropriation of lease payments.

Strengths:

--Maintenance of positive ending fund balances through prolonged economic decline

--Moderate debt burden, with minimal variable-rate exposure

--Conversion of pensions to defined-contribution from defined benefit in 1997

--Conservative revenue forecasting and monitoring practices

--Requirement that governor cut expenditures in response to revenue shortfalls

Challenges:

-- Exposure to financially struggling local entities

-- Population and employment base erosion caused by auto industry's decline

-- Weakening of personal income trends

Detailed Credit Discussion:

BONDS WILL REFUND OUTSTANDING SBA DEBT AND FINANCE NEW PROJECTS

The bulk of the current issues will be used to refund existing debt for interest cost savings. The estimated net present value saving is $11.5 million, or 2.6% of the debt to be refunded. The transaction will extend the debt by seven years and result in somewhat higher debt service costs starting after about 12 years, but projected changes in SBA debt service are small in relation to the current annual amount (about $220 million). New projects being funded are improvements to essential state facilities, such as administrative buildings in Lansing, the state capital; correctional buildings; state university and community college campuses; and a new headquarters for the state police. The variable-rate component, Series II-B, will be used to partially refund the SBA's outstanding variable-rate debt, Series 2007 Multi-Modal Revenue Bonds, Series I (Facilities Program).

BUDGET FOR FISCAL 2012 WILL IMPOSE BROAD-BASED SPENDING CUTS

The state's fiscal 2012 budget relies on spending cuts of almost $1.6 billion to achieve balance. The expenditure reductions are widespread, with a third of them coming from school funding, 14% each from health care and higher education, 9% each from human services and employee concessions and 7% from corrections. Local government revenue sharing will provide for about 9% of the anticipated spending reductions. Though some pieces are still unresolved, the state has ample time to address these issues before the October 1 start of its fiscal year. One area is employee concessions, which are expected to account for $145 million of savings. The proposed concessions - which have been reduced from an earlier target of $180 million - are under negotiation with employee unions. Layoffs could be used as an alternative. Additionally, the state's governor is seeking an advisory state supreme court ruling on a new tax applicable to baby boomers' pension income. The tax, which will not apply to social security benefits, is part of a package of individual income tax changes expected to generate $559 million in fiscal 2012 and $1.42 billion on a full-year basis. Other elements of this package include freezing the individual income tax rate after it falls to 4.25% in October, from the current 4.35%, rather than continuing to lower it to 4.15% the following year as previously anticipated. Taxation of pension payments could be challenged in court by public plan participants on the grounds that it effectively reduces promised benefits.

The state also is repealing its existing business tax system, in favor of a flat 6% corporate income tax. The impending business tax change, which exempts small businesses, will have an estimated net cost of $1.7 billion on a full-year basis. The fiscal 2012 revenue loss for the state's general fund and its School Aid Fund is about $535 million, based on January 1 implementation and accounting for offsetting increases in individual income tax revenue. Receipts of these two operating funds are forecast at $18.45 billion in fiscal 2012, about 1% less than the $18.64 billion projected for fiscal 2011. Without the tax changes, combined general and school aid fund revenue would have grown almost 2%, to a projected $18.99 billion, in fiscal 2012.

POSITIVE ENDING BALANCES UNDERSCORE DETERMINATION TO PRESERVE STRONG PROFILE

Through fiscal 2010, the state has maintained positive available fund balances on a GAAP basis, despite its economic and revenue challenges. Although the state's available fund balances have fallen to a low level, many other states have incurred negative available fund balances on a GAAP basis. In view of Michigan's declining economic base, the positive balances indicate management's determination to preserve a strong financial profile. The state has used tax increases, spending restraint and some non-recurring measures to avoid GAAP-basis deficits. On a GAAP basis, the state's fiscal 2010 fund balances included $189 million in available general fund balance and Budget Stabilization Fund (BSF) combined, as well as $256 million of School Aid Fund (SAF) ending balance available to be spent for SAF purposes in fiscal 2011. The state believes its combined BSF and available general fund balance will grow by as much as 36% this year, to about $257 million. Fiscal 2012 budget legislation signed by the governor this month allocates $255 million to rebuild the state's Budget Stabilization Fund (BSF), which since fiscal 2005 has held about $2 million, down from a peak of $1.3 billion in fiscal 2000.

TROUBLED LOCAL GOVERNMENTS MAY POSE FINANCIAL CHALLENGES FOR THE STATE

Michigan is taking steps to address challenges faced by financially struggling local governments, including Detroit Public Schools (B1, negative) and the City of Pontiac (Caa1, negative), as well as unrated cities such as Benton Harbor and Ecorse. The state on March 16 enacted the Local Government and School District Fiscal Accountability Act, which allows the state to intervene earlier in the affairs of stressed municipalities and increases the authority of state-appointed emergency managers. Emergency managers are now able to modify or terminate employee contracts and suspend bargaining for five years. Triggers for state intervention have been increased to include unpaid pension contributions or employee compensation, delayed financial reports, fiscal year-end deficits, debt defaults, and downgrades to Baa or below. We believe that the state's existing legal framework will limit its financial exposure to the most severe crises at the local level. The state provides support for municipal obligations, most notably through its constitutionally mandated School Bond Qualification and Loan Program, under which about $14.4 billion of school district bonds are currently outstanding. School districts that issue these bonds are eligible to receive loans to help meet debt service costs exceeding the amount raised by a required 7 mill property tax. State loans can be made through the School Bond Loan Fund or, since 2005, through the School Loan Revolving Fund, and the state can issue both G.O. bonds and revolving fund-backed bonds to provide these loans. The current amount of state loans to qualified bond issuers was $1.06 billion as of December 31, 2010, up from $954 million as of September 30, 2009. The state also must provide emergency support in the event a district with qualified bonds cannot make timely debt service payment. The program has existed since 1955, and the state on only one occasion has had to advance funds to avert a default. Annual debt service on all outstanding qualified school bonds for fiscal 2012 is $1.46 billion, or 7.1% of the state's projected 2012 operating fund expenditures. Given the diversity of the pool of borrowers and the state's oversight of this program, we view the probability of an unmanageable, emergency draw on state support as minimal.

AUTO INDUSTRY APPEARS TO BE STABILIZING, BARRING RENEWED RECESSION

A renewed recession leading to stagnating auto sales could put pressure on the state's rating, but the domestic auto industry appears to be stabilizing. Employment in Michigan's transportation equipment manufacturing sector increased 3.2% last year, after a 26% drop in 2009. The Michigan-based U.S. auto manufacturers have reported generally improving sales, although with some weakening in May. The state's current revenue forecast is based on light vehicle sales at a 13-million unit pace this year, up 13% from 2010. Further recovery is anticipated in 2012, when the state expects 14.6 million light vehicle sales. Restructuring in the industry -- including massive head-count reductions, implementation of a new UAW contract that discontinued the JOBs bank program and freed manufacturers of retiree health care obligations -- is expected to enhance manufacturers' profitability.

Economic stabilization at a lower base by no means assures return to pre-existing employment levels. The auto industry's downsizing will have lasting demographic effects on Michigan, which was the only state to lose population in the past decade. The state's manufacturing sector has been almost halved, leaving employment at 474,000 in 2010, compared with almost 900,000 in 2000. Total non-farm employment has declined by about 17% (or approximately 815,000 jobs) since 2000, based on Bureau of Labor Statistics monthly jobs data through December 2010. Unemployment has declined but remains high, at a preliminary 10.3% in May compared with the nation's 9.1%. Much of the improvement in Michigan may reflect workforce reduction caused by the unemployed abandoning their job searches, and by outmigration.

RESPONSES TO ECONOMIC CHALLENGES HIGHLIGHT GOVERANCE STRENGTHS

Michigan's ability to handle a severe and protracted economic downturn underscores the importance of its governance and financial management strengths. Among these is the use of a binding, consensus revenue-estimating process, with forecasts produced at least twice a year, in January and May. Another governance strength is a constitutional requirement that the governor reduce authorized expenditures when actual revenues fall short of budgetary projections. While these actions require approval from House and Senate appropriating committees, the state has a well-established practice of making such midcourse adjustments, and this helps explain the state's restrained spending growth in recent years. Michigan has generally enacted budgets in a timely fashion, notwithstanding brief, limited shutdowns and temporary appropriation legislation in recent years. Audited financial reports also have been completed on a timely basis. The state does not produce multi-year financial plans or debt affordability analyses, but the new governor has implemented a practice of adopting out-year planning budgets.

DEBT BURDEN HAS REMAINED MODEST

Michigan has retained a modest debt burden, ranking 36th for debt-per-capita ($762, versus a 50-state median of $1,066) and 34th for debt to income (2.2%, versus the 2.8% national median) in Moody's 2011 State Debt Medians report. The state's total net tax-supported debt, amounting to $7.57 billion as of the end of last year, consists primarily of $1.7 billion of general obligation bonds and $3 billion of State Building Authority (subject-to-appropriation) bonds. It also includes revenue bonds issued by the state's Department of Transportation that are not linked to the state's G.O. credit. Principal and interest on the state's net tax-supported debt in fiscal 2012 amounts to $773 million, about 3.4% of operating and transportation fund revenues available to support the debt. G.O. borrowings by the state require approval in a public vote and by legislative super-majorities (two thirds). The state's gross debt burden further includes the $14.4 billion of Qualified School Loan Bonds issued by school districts. Annual debt service on these bonds, which is paid by school districts but also a contingent liability for the state, is $1.46 billion in fiscal 2012.

PENSION LIABILITY LIMITED BY CREATION OF DEFINED CONTRIBUTION PLAN

Michigan has limited its long-term liabilities for retiree benefits significantly, by converting to a defined-contribution plan for new employees as of March 31, 1997. Prior to the dramatic stock market declines in the second half of 2008, the state's pensions were adequately funded, at about 86% in aggregate. While the funding of Michigan-administered pensions has deteriorated since then, it remains adequate, at about 80% in aggregate, based on the most recent actuarial information available. The state's liability for other post-employment benefits (or OPEB, primarily health care), is large, with an annual required contribution of almost $1 billion. Including annual required contributions for pensions, OPEB as well as debt service, Michigan's total fixed costs amount to an estimated 10% of revenue. The state may have leeway to reduce its OPEB costs over time. In 2005, the Michigan Supreme Court ruled that the statute providing for State Employees' Retirement System health benefits is not protected by state or federal constitutional contracts clauses. The state last year enacted a law requiring Michigan Public School Employees Retirement System (MPSERS) participants to contribute 3% of annual compensation to a retiree health care trust. School employees challenged this provision in a State Court of Claims, and a judge on April 1, 2011, held that the law is unconstitutional. Fiscal implications for the state, which plans to appeal the ruling, are unclear.

Outlook

The state's outlook is stable, supported by strong management practices, such as mid-year spending adjustments. Future rating decisions are likely to reflect how the state manages its economic challenges, and whether it returns to structural balance as federal supports are removed.

What could change the rating - UP:

-Steady trend of rebuilding financial reserves

-Demonstration of lasting structural balance

-Economic performance in line with nation based on job growth and other measures

What could change the rating - DOWN:

-Renewed reliance on deficit financing or other non-recurring measures to achieve budget balance

-Indications of significantly reduced liquidity

-Deterioration in economic forecast versus current assumptions

-Assumption of burdensome financial commitments in support of local governments

The principal methodology used in this rating was The Fundamentals of Credit Analysis for Lease-Backed Municipal Obligations, published in October 2004.

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's information, 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

Edward Hampton
Analyst
Public Finance Group
Moody's Investors Service

Marcia Van Wagner
Backup Analyst
Public Finance Group
Moody's Investors Service

Contacts

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


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

MOODY'S ASSIGNS Aa3 RATING TO STATE OF MICHIGAN'S PLANNED ISSUANCE OF APPROXIMATELY $670 MILLION OF STATE BUILDING AUTHORITY BONDS IN FOUR SERIES
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