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.
Rating Update:

MOODY'S ASSIGNS Aa3 TO HUDSON CO IMP AUTH'S (NJ) COUNTY GUARANTEED HARRISON STADIUM LAND ACQUISITION CAPITAL APPRECIATION BONDS, SERIES 2006A-1; OUTLOOK IS NEGATIVE

22 Jun 2011

$364 MILLION OF LONG-TERM GO COUNTY AND COUNTY-GUARANTEED DEBT RATED Aa3, INCLUDING THIS SERIES

County
NJ

Opinion

NEW YORK, Jun 22, 2011 -- Moody's Investors Service has assigned Aa3 rating to Hudson County Improvement Authority's (NJ) County Guaranteed Harrison Stadium Land Acquisition Obligation Capital Appreciation Bonds, Series 2006A-1. The total original principal at the time of issuance was $30.5 million. The ultimate security on this issue is derived from the county's general obligation unlimited tax pledge by way of a county guarantee. Therefore, the rating on this issue is directly linked to the county's Aa3 rating and negative outlook.

RATING RATIONALE

While the notes are expected to be repaid with lease payments from the Town of Harrison (G.O. rated Ba3/negative outlook) , the ultimate security for this issue is derived from Hudson County's absolute and unconditional obligation pledge of the county.

Affirmation of the county's long-term general obligation rating of Aa3 reflects the county's substantial, expanding tax base and our expectation that the county will maintain a stable financial position supported by conservative management of economically sensitive revenues and limited reliance on one-time revenue sources. We believe the county is relatively well positioned to maintain financial stability in the coming years despite revenue constraints created by the imposition of a more stringent statewide 2% property tax levy limitation, given continued growth of the county's taxable base as PILOTs expire and properties become taxable.

The negative outlook reflects the county's exposure, through guaranteed debt, to the Town of Harrison's (GO rated Ba3/negative outlook) underperforming development projects as well as to Hudson County Improvement Authority's relatively stressed solid waste system. Future rating reviews will consider the county's ability to maintain its current financial position in light of a heightened risk to fund guaranteed debt service, given the Town of Harrison's recent challenges in meeting debt obligations. In addition, the negative outlook considers the county's exposure to short-term market volatility, as county and county-guaranteed short-term notes and bonds, amounting to $307.7 million, represent approximately one-third of total outstanding debt and take the form of maturities ranging from $27 million to $163 million.

STRENGTHS

-Substantial and diverse tax base with favorable location

-Stable, structurally balanced financial operations

CHALLENGES

-Significant exposure to county-guaranteed enterprise debt and short-term debt

-Below average wealth levels

-Above-average debt burden

DETAILED CREDIT DISCUSSION

HUDSON COUNTY IMPROVEMENT AUTHORITY IS THE CONDUIT ISSUER

Hudson County Improvement Authority (HCIA) is a conduit issuer and has no independent taxing authority. The bonds have been issued on behalf of Harrison Township (rated Ba3/negative outlook), which has entered into lease with HCIA. While lease payments, which are a general obligation of the town, are expected to be the source of repayment, the bonds are backed by an unconditional general obligation county guarantee. If 30 days prior to debt service payment dates (December 15 and June 15), funds are insufficient to pay debt service, the trustee must notify the county, HCIA and town of the insufficiency within two business days. If the deficiency has not been cured by the township within 15 days, the trustee will so notify the county within two business days. The county is then required to make payment to the trustee, who will transfer funds on the debt service payment date. Moody's believes this structure gives the county sufficient time to appropriate for debt service. The issue is further secured by a standard debt service reserve fund. To date, the county guarantee has never been called upon, but HCIA has loaned monies to Harrison to make its December 2010 lease payment on these bonds (discussed below).

SUBSTANTIAL AND DIVERSE TAX BASE WITH BELOW AVERAGE WEALTH LEVELS

Moody's expects continued growth in the county's substantial $66.6 billion tax base given ongoing development, albeit at moderate levels as the county has been impacted by the slowing residential housing market. The county benefits from its location directly across the Hudson River from New York City (rated Aa2/stable outlook) as well as the significant development and available employment within the county. The county has an excellent transportation network, including highways, railroad, commuter rail, ferry and underground train service to New York City, all of which support the flow of residents to and from New York. After September 11, 2001, many New York City-based companies, including Goldman Sachs (senior unsecured debt rated A1/negative outlook), UBS (long term debt rated Aa3/negative outlook) and Credit Suisse First Boston moved all or a portion of their operations to the county. Reflective of Hudson County's strategic location within a robust metropolitan area as well as its own diverse economy, the county's largest employers include several major corporations and institutions such and United Parcel Services (Aa3/stable outlook), Bank of Tokyo Mitsubishi Trust, Hoboken University Medical Center and Jersey City Medical Center. Of note is the economic activity along the waterfront in Jersey City, although these properties have been granted multi-year PILOT contracts and therefore are not included in the county's current equalized valuation. These waterfront developments have attracted numerous new employers to the county, including The Depository Trust & Cleaning Corporation (DTCC), which will bring with it a staff of about 1,600 in 2012. Other municipalities in the county, including Bayonne (G.O. rated Baa1/negative outlook), Hoboken (Guaranteed Hospital Revenue Bonds rated Baa1), West New York (no rating) and Harrison (G.O rated Ba3/negative outlook), have begun to implement redevelopment plans, which are expected to spur additional growth in the medium term.

Growth in equalized values, which had averaged strong 16.9% annual gains between 2003 and 2008, slowed considerably to a modest 2.8% in 2009 and declined in 2010 by 2.9%, reflecting the economic recession and housing market downturn. Growth is expected to remain modest over the near term as development continues to be dampened by slow economic recovery, although officials report some recent stabilization of housing prices. The county is experiencing increased tax appeal claims, although the impact on tax base valuation is not yet determined. In 2011 Added and Omitted tax revenues, which reflect properties added during the course of the year, retuned to 2008 levels of $4.8 million with growth of $4.6 million after more moderate years in 2009 and 2010 ( $1.7 million and $2.8 million, respectively), evidencing a combination of new development and properties coming off PILOTs in Jersey City. A solid equalized value per capita of $111,429 only partially reflects the quality of development as much of the new real estate is not yet on the tax rolls. Socio-economic indicators fall 20% to 30% below state levels and the poverty rate of 15.5% as of the 2000 Census is the second highest in the state. The February 2011 unemployment rate of 10.8% is above state and national medians (9.9% and 9.5%, respectively) and a marked decrease from a year ago when unemployment equaled 11.2%.

STABLE, ALBEIT NARROW, RESERVE LEVELS

Moody's expects the county to maintain its Current Fund balance at approximately the current level given a four-year track record of maintaining reserves between 5% and 6% and the county's stated commitment to maintaining structural balance, as reflected in annual moderate property tax increases and conservative budgeting of economically sensitive revenue sources. The county ended fiscal 2008 with a Current Fund balance of $24.3 million (5.27% of revenues) after fully replenishing $22 million of fund balance appropriated as a revenue source in the budget and adding $1.8 million to reserves. Notably, revenues from the Register of Deeds exceeded budgeted levels by more than $500,000, reflecting a conservative approach to budgeting of this economically sensitive revenue stream (budgeted at $9.4 million as compared with $13 million in actual receipts in 2007). This differentiates the county from its peers, many of whom saw shortfalls in this area in 2008. Sources of fund balance replenishment included surplus budgeted revenues ($2.4 million), particularly related to housing federal inmates and the county's jail facility, the receipt of non-budgeted revenues ($6.7 million), and the cancellation of current year appropriations, prior year appropriation reserves, and contracts and commitments ($3.2 million, $4 million and $4.5 million, respectively). The county received 53.3% of Current Fund revenues from property taxes, which local municipalities are responsible for remitting to the county in full, thereby ensuring a high level of predictability for its major revenue source.

Fiscal 2009 operations resulted in a modest increase in the Current Fund balance of $243,000 after replenishing $23.8 million of surplus utilized as revenue. Consequently, reserves grew to a solid $24.5 million, or 5.21% of revenues. Sources of replenishment included over-performance of anticipated revenues (by approximately $1.5 million) driven by strong results at the county's hospital, the receipt of unanticipated revenue from housing state and federal inmates at the county's jail facility ($4.5 million), the cancellation of current year expenditures ($6.7 million), largely resulting from vacant positions (approximately 350 positions) as part of management's plan to control expenditures in light of declining economically sensitive revenues, and the cancellation of prior year appropriation reserves in line with recent trends. Register of Deeds revenues were budgeted to decline to $6.8 million (compared with actual collection of $10.06 million in 2008), in keeping with recent past practice. These economically sensitive revenues came in close to budget for the year. Fiscal 2009 operations reflect the deferral of a portion of the county's pension contribution ($6.8 million) as allowed by state law in 2009.

Unaudited fiscal 2010 operations indicate full replenishment of $24 million from fund balance utilized as a revenue in the Current Fund, with a modest addition to fund balance of approximately $300,000. Current Fund balance as a percentage of revenues is expected to remain flat at 5.2%. Despite significant increases in pensions costs of approximately $7 million (resulting from the deferral in 2009) and health benefit costs of approximately $5 million, total appropriations for 2010 declined by 1.3% (budget to budget), reflecting work force reductions through attrition and hiring freezes. Given unaudited figures, appropriated fund balance is expected to be replenished with the payment received from a prior refunding ($1.03 million) and nonbudgeted revenues from additional prisoner inmates ($1.4 million) in conjunction with traditional sources of replenishment, such as cancelled and lapsed appropriations. The working fiscal 2011 budget indicates a similar fund balance appropriation as the previous year of $24 million, a high 96% of total Current Fund balance. Despite the large appropriation, we anticipate financial operations will have similar results as previous years and the county will replenish most of that amount, particularly given the increase in added and omitted taxes receivables for 2011.

DEBT BURDEN EXPECTED TO REMAIN MANAGEABLE; SIGNIFICANT AMOUNT OF COUNTY-GUARANTEED DEBT

Moody's expects that the county's above-average net direct debt burden (1.4%) will remain manageable given limited future borrowing plans, ongoing tax base expansion and below average amortization of debt (69.2% repaid within 10 years). Debt service on bonds is a high 9.6% of fiscal 2010 expenditures (unaudited), reflecting the fact that the county has financed a significant portion of its infrastructure through lease purchase agreements (approximately $295 million outstanding as of April 2011).

We also note the county's large amount of guaranteed short and long term debt (50% of total outstanding debt), particularly $39.4 million of county-guaranteed Harrison Stadium Land Acquisition Special Obligation Capital Appreciation Bonds, Series 2006 A-1 and A-2 (GO rated Aa3/negative outlook). Although the county has not been called upon to pay debt service for these bonds to date, the development site is not generating sufficient PILOT payments to cover debt service as intended, and Harrison (G.O. rated Ba3/negative outlook) has paid 2010 debt service with short term notes issued through the Hudson County Improvement Authority. The town expects to do the same for its 2011 principal and interest payment. Looking ahead, we believe there is a heightened risk that the county may be called upon to make payment, given Harrison's challenges in meeting debt service obligations. The county also guarantees $270 million of BANs through the HCIA, which are repaid by participating municipalities through loan pools. We view the large amount guaranteed debt, 50% of the county's total outstanding debt, in combination with its already above-average debt burden as a potential risk to financial stability should the guarantees be called.

OUTLOOK

The negative outlook reflects the county's exposure, through guaranteed debt, to the Town of Harrison's (GO rated Ba3/negative outlook) underperforming development projects as well as to Hudson County Improvement Authority's relatively stressed solid waste system. Future rating reviews will consider the county's ability to maintain its current financial position in light of a heightened risk to fund guaranteed debt service, given the Town of Harrison's recent challenges in meeting debt obligations. (Please see our report on the Town of Harrison dated May 20, 2011 for more.) In addition, the negative outlook considers the county's exposure to short-term market volatility, as county and county-guaranteed short-term notes and bonds, amounting to $307.7 million, represent approximately one-third of total outstanding debt and take the form of maturities ranging from $27 million to $163 million.

WHAT COULD CHANGE THE RATING (UP - REMOVAL OF THE NEGATIVE OUTLOOK):

- Growth in taxable assessed valuation over the medium term

-Increased Current Fund balance

- Increased liquidity

-Decline in amount of county-guaranteed debt

WHAT COULD CHANGE THE RATING (DOWN):

-Failure to pay county-guaranteed debt service payments should the need arise

-Decline in financial position as a result of fulfilling county-guaranteed debt service obliagations.

- Material multi-year declines in fund balances and liquidity

- Significant growth in the HCIA's debt burden through direct borrowing or county-guaranteed debt

KEY STATISTICS

2000 Population: 601,146

2007 Population (est.): 598,160

2010 Equalized Value (estimated): $66.6 billion

2010 Equalized Value Per Capita: $111,524

1999 Per Capita Income (as % of State and US): $21,154 (78% and 98%)

1999 Median Family Income (as % of State and US): $44,053 (67% and 88%)

Direct Debt Burden: 1%

Amortization of Principal (10 years): 69.2%

Fiscal 2009 Current Fund balance : $24.5 million (5.2% of Current Fund revenues)

Fiscal 2010 Current Fund balance (unaudited): $25.1 million (5.2% of Current Fund revenues)

Long term G.O. debt outstanding: $622 million (approximately $364 million rated by Moody's

The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009.

REGULATORY DISCLOSURES

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

Moody's Investors Service considers the quality of information available on the credit satisfactory for the purposes of maintaining 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

Josellyn Yousef
Analyst
Public Finance Group
Moody's Investors Service

Andy Moleon
Backup Analyst
Public Finance Group
Moody's Investors Service

Julie Beglin
Senior Credit Officer
Public Finance Group
Moody's Investors Service

Contacts

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


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

MOODY'S ASSIGNS Aa3 TO HUDSON CO IMP AUTH'S (NJ) COUNTY GUARANTEED HARRISON STADIUM LAND ACQUISITION CAPITAL APPRECIATION BONDS, SERIES 2006A-1; OUTLOOK IS NEGATIVE
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