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 DOWNGRADES DREXEL UNIVERSITY'S (PA) REVENUE BONDS TO A3 FROM A2 AND ASSIGNS A3 RATING TO SERIES 2011A REVENUE BONDS; OUTLOOK IS STABLE

21 Apr 2011

DOWNGRADE IMPACTS $260 MILLION OF RATED DEBT, INCLUDING THE CURRENT OFFERING; UNIVERSITY HAS A TOTAL OF $437 MILLION OF PRO FORMA RATED DEBT

Pennsylvania Higher Educational Facs. Auth.
Higher Education
PA

Moody's Rating

ISSUE

RATING

Drexel University Revenue Bonds, Series 2011A

A3

  Sale Amount

$150,000,000

  Expected Sale Date

05/04/11

  Rating Description

Private University Revenue

 

 
Moody's Outlook   Stable
 

Opinion

NEW YORK, Apr 21, 2011 -- Moody's Investors Service has downgraded Drexel University's (Drexel) revenue bond rating to A3 from A2 and has assigned an A3 rating to Drexel University's Series 2011A bonds to be issued through the Pennsylvania Higher Educational Facilities Authority. For more information on rated debt see RATED DEBT section below. The rating outlook is stable.

SUMMARY RATING RATIONALE

The downgrade and the A3 rating reflect the University's escalating balance sheet and operating leverage and tepid financial resource growth in recent years coupled with a 22% increase in pro forma debt to $476 million from fiscal year end 2010. We believe Drexel's sound student market position with growing enrollment and notable revenue growth with solid net tuition per student of $21,637 in fiscal 2010 will continue. While operating performance has been sufficient, many rated large urban universities have considerably stronger cash flow in support of operations.

CHALLENGES

*Relatively leveraged balance sheet with expendable financial resources of $225 million cushioning pro forma direct debt a thin 0.5 times, as compared to Moody's FY 2009 median of 0.8 times for large, A-rated private universities. With pro forma debt to operating revenue of 62%, Drexel's operating leverage is increasing as well, from 51% at the end of fiscal 2010.

*Debt structure adds risk with 26% of pro forma debt in variable rate mode, which includes $123 million letter of credit exposure with numerous optional bank termination events and covenants as well as another $121 million exposed to financial covenants with National Public Finance Guaranty. Monthly liquidity of $163 million covers pro forma bank debt by 131% and counterparty diversity slightly mitigates the risk.

*Strong competition for students in mid-Atlantic region, including institutions with larger endowments and fundraising support, reflected in yield data on admitted freshmen applicants which came in at 10.4% in fall of 2010, significantly weaker than 21.7% in 2006.

*Patient care exposure in competitive Philadelphia market with 12.0% of operating revenues from patient activities in FY 2010.

STRENGTHS

*Established market position in the mid-Atlantic higher education marketplace for an urban, comprehensive university with full-time equivalent enrollment (FTE) of 19,655 students and niche program in cooperative education; solid growth in net tuition per student which was $21,637 in FY 2010, up 6% from the prior year with management reporting additional growth in FY 2011.

*Notable momentum and growing revenue base with Moody's adjusted operating revenue of $757 million in fiscal 2010, up 27% from fiscal 2006. In addition to traditional educational programs, revenue growth has been aided by online programs which totaled $54 million in FY 2010.

*Continued fundraising success with $38 million in average gift revenue per year in fiscal years 2008 through 2010. The University announced a $45 million gift, its largest ever, in the current year for the LeBow College of Business.

*Substantial financial resource base with FYE 2010 total financial resources of $445 million.

*Growing base of research activity with research expenditures of $95 million in FY 2010, which is growing and constitutes 9% of revenue.

DETAILED CREDIT DISCUSSION

USE OF PROCEEDS: Proceeds will provide funds for several capital projects, refinancing of the prior fixed rate (Series 1997, 1998 and 1998-2 bonds) and variable rate (Series 2002-2, 2002-B and 2003-B) bonds and to pay costs of issuance. Major capital projects total approximately $103 million and include the LeBow College of Business, the Papadakis Integrated Sciences Building and a new home for the Westphal College of Media Arts and Design.

LEGAL SECURITY: The loan agreement is a general obligation of the University secured by Unrestricted Gross Revenues.

INTEREST RATE DERIVATIVES: The University has entered into two variable-to-fixed rate swap agreements associated with its Series 2005B bonds(counterparty is Wells Fargo, formerly Wachovia Bank, rated Aa2 andterminates on May 1, 2030) and a $15 million bank note (counterparty is TD Bank rated Aa2 and terminates on January 2, 2014). The notional amount on the Wells Fargo swap was $29.8 million at with a market valuation of a $2.6 million liability to the University as of March 31, 2011. The notional amount of the TD Bank swap was $18.9 million at FYE 2010 with a market valuation of $420,624 liability to the University on the same date. The Wachovia agreement collateral posting threshold for Drexel is sensitive to the move to A3 from A2, with the threshold moving from $10 million to zero. Management reports that Wells Fargo may not require the collateral posting, but in either case we believe the liquidity (monthly liquidity of $163 million at fiscal year end 2010) provides a substantial cushion relative to the derivative exposure.

MARKET POSITION/COMPETITIVE STRATEGY: SOLID MARKET REPUTATION FOR URBAN COMPREHENSIVE UNIVERSITY

Moody's believes that Drexel's niche as a well-known urban university with a strong reputation in engineering and information technology and long-standing commitment to cooperative ("co-op") education will continue to underpin a solid credit quality for the foreseeable future, although the University may experience increasing price sensitivity in the coming years. Drexel's co-op program is unique in Pennsylvania, and one of only three in the United States. Under the five-year program, undergraduates alternate periods of on-campus study with full-time employment in fields related to their academic interests. More than 1,200 employers in business, government, and education participate in the program.

Founded in 1891 by Philadelphia financier and philanthropist Anthony Drexel, the University enrolled 19,655 full-time equivalent (FTE) students in the fall of 2010, up remarkably from just under 11,000 FTE students in 2001. Roughly 65% of its students are undergraduates. Selectivity for undergraduates (full-time freshmen) came in at 55.1% in the fall of 2010 with yield on admitted students of a low 10.4% (down from 21.7% in fall 2006) indicating fierce competition for students in the mid-Atlantic region. Net tuition per student has been increasing, to $21,637 in FY 2010, up 6.3% from the prior year. Management reports another strong year of net tuition revenue growth in FY 2011, up 9.6% aided by a mix of enrollment growth (around 3.3%) and net tuition growth.

Key competitors include other regional and national technology-oriented private institutions, such as Rensselaer Polytechnic Institute (rated A3), Lafayette College (Aa3), and Lehigh University (Aa2) as well a number of public institutions including the nearby Temple University (Aa3). We believe Drexel benefits from its location in the University City neighborhood of Philadelphia that has become an increasingly desirable location for traditional college age students over the last two decades.

Graduate enrollment totaled 6,900 FTE students in the fall of 2010 and has been a significant source of enrollment growth. In addition to the acquisition of a College of Medicine (with over 1,100 students), the University has grown graduate enrollment with the addition of a law school (expecting full accreditation in the spring of 2011) along with a number of other new programs. For both undergraduate and graduate programs Drexel has also developed a number of e-learning initiatives that have aided enrollment growth.

With grants and contracts comprising 15% of its Moody's calculated operating revenue base, the University has a sizeable research enterprise with $66 million of research awards in FY 2010. Federal agencies make up 84% of that total with substantial exposure to the National Institute of Health.

OPERATING PERFORMANCE: SOLID OPERATING PERFORMANCE ALTHOUGH CASH FLOW IN SUPPORT OF DEBT SERVICE IS NOT AS STRONG AS MANY LARGE URBAN UNIVERSITIES

Moody's expects Drexel and its subsidiaries will continue generating positive operating results in the near future, in line with recent trends. The three-year average operating margin of 2.9% includes the patient care enterprise of its College of Medicine. While the FY 2010 operating cash flow margin of 7.9% is sound, we note that Moody's large A-rated universities typically have much stronger cash flow performance with a FY 2009 median of 13.6%. Average debt service coverage is likewise adequate at 2.3 times as compared to the large A-rated median of 3.0 times. Given the 22% increase in debt, the University will need to increase cash flow to support debt service with pro forma maximum annual debt service now equating to 4.6% of FY 2010 operating expenses.

Drexel has limited revenue diversity with investment income and gifts comprising just 6% of FY 2010 $757 million operating revenue base. Tuition and auxiliaries account for the lion's share of operating revenues (64%), followed by research grants and contracts (15%), patient care revenue of its physician practice group (12%), gifts (2%), and investment income (4%). Although the University has no formal relationship with the Commonwealth of Pennsylvania (general obligation rating of Aa1), it has received annual support from the state since 1959 for instruction and financial aid. The level of support for Drexel is $3 million in FY 2011, down from approximately $18 million in FY 2006.

The Philadelphia Health & Education Corporation (PHEC), operating under the name Drexel University College of Medicine, is a 501(c)(3) affiliate of the University and consolidated in the University's financial statements. PHEC is not obligated on the University's debt. Drexel's faculty practice plan, Drexel University Physicians, is an internal division of the College of Medicine. Drexel University College of Medicine (PHEC) has a majority of its operational ties to Tenet Healthcare Corporation, which Moody's rates B2. In return of the College providing supervisory & teaching, program and directorship services to Tenet, PHEC is compensated by Tenet under the terms of an Amended and Restated Academic Affiliation Agreement and other relationships. In FY 2010, the College received $18 million for services provided to Tenet. PHEC has actively sought to increase the diversity of training sites for its medical students and has become less reliant on Tenet over the recent years. Approximately 65% of third and fourth-year medical student training occurs outside of Tenet hospitals, while all residency physicians are employed by Tenet.

BALANCE SHEET POSITION: LEVERAGE INCREASING FASTER THAN FINANCIAL RESOURCES AFTER 2009 LOSS; LIQUIDITY RELATIVE TO DEMAND DEBT IMPROVES THROUGH PLAN OF FINANCE

Moody's anticipates that Drexel will continue to enjoy a relatively healthy pool of financial assets even as leverage increases. At the end of FY 2010, the University had total financial resources of $445 million. Expendable financial resources for fiscal 2010 was $225 million, down from $391 million as of June 30, 2008 from investment losses and the use of cash flow for capital investment. Expendable financial resources cushion pro forma direct debt 0.5 times, below Moody's median of 0.8 times for large A-rated private universities. In addition, Drexel has a material level of non-cancelable operating lease commitments which add $69 million to Moody's calculation of comprehensive debt. The lease agreements are primarily related to the College of Medicine. Expendable financial resources cushion pro forma comprehensive debt 0.44 times

Drexel plans to continue the recent pattern of relatively intense investment in capital facilities aided by the proceeds of the Series 2011A bonds. Purchases of property, plant and equipment totaled $372 million in fiscal years 2006 through 2010, with an average capital spending ratio three times depreciation expense. The University has received funding from diverse sources, including restricted gifts for the capital investments, although the use of reserves for the capital investments has reduced financial resource levels. Future borrowing plans are limited. The University is exploring a partnership development on its campus with a mixed use development that would provide more student housing. The estimated project size is $91 million.

The 2011A plan of finance includes $100 million of new money increasing pro forma debt to $477 million from $390 million as of June 30, 2010. Management believes that the expanded academic facilities will allow for enrollment growth and produce marginal net revenue to aid in the increased debt service, with pro forma maximum annual debt service comparing to 4.6% of fiscal 2010 operating expenses.

MBIA (now National Public Finance Guarantee) has insured the bulk of Drexel's fixed rate debt. The MBIA agreements and other bank agreements include a three-pronged additional bonds test and ongoing expendable resources to debt test. Through an amended agreement, the insurer will relax the expendable resource to debt threshold from its prior 50% standard through June 30, 2013, measured once a year. The threshold will be 35% for June 30, 2011 and 45% for June 30, 2012. The related increase in leverage is a primary driver of our downgrade action to A3 from A2. The rating will remain sensitive over time to the progress relative to the financial plan to meet and exceed the revised and escalating covenant.

The Series 2011 plan of finance also includes a reduction in demand debt that totaled $143 million at FYE2010. Pro forma demand debt is $123 million. The University will be retiring its Multi-Modal Revenue Bonds Series 2003-B backed by an Allied Irish (rated Ba2/NP) letter of credit. The two party pay rating on the Series 2003-B bonds is Aa3/VMIG 3 currently. The University also plans to replace its $64 million of its Landesbank Baden-Wuerttemberg Bank (rated Aa2/P-1) LOC debt with new agreements with JPMorgan Chase (rated Aa1/P-1). Other LOC agreements are with TD Bank (rated Aa2/P-1) and Wells Fargo (rated Aa2/P-1). The letter of credit agreements contain a number of events of default which could lead to accelerated repayment. The TD Bank agreement includes an event of default with a rating trigger below A2 that management is currently renegotiating along with a planned extension for the agreement that has a current stated expiration date of September 30, 2011. Relative to renewal risk of the various agreements, we believe the University has a history of viable market access and a healthy level of diversity in its banking counterparties.

With the reduction of demand debt, Drexel's coverage of demand debt from monthly liquidity improves from 114% to 131%. Monthly liquidity of $163 million as of June 30, 2010 was 32% of total cash and investments and equated to 84 monthly days cash on hand as compared to our FY 2009 A rated median of 241 days. Management's multi-year financial plan includes building operating cash with growth assumptions not dependent on increases from investment returns.

The University's pooled endowment had a 12.4% total return for the twelve months ending June 30, 2010 after a punishing 25.2% loss in fiscal 2009. At the end of FY 2010 the allocation was 31% international equities, 29% domestic equities, 16% hedge funds, 13% fixed income and cash, and 3% in private capital and 8% real assets.

Total gift revenue has averaged $38 million over the last three years pointing to substantial donor support well above Moody's median of $19 million for large A-rated private universities. The University is in the silent phase of its next comprehensive capital campaign and earlier this year announced a $45 million gift for the LeBow College of Business, its largest single gift. We believe donor support will continue to provide an important source of funds for the capital needs of Drexel as well as building endowed funds relative to its growing expense base.

Outlook

The stable outlook is based on our expectations of healthy operating performance combined with expectations of a market position that will support the University's growth plans. Moody's outlook anticipates no additional borrowing without offsetting growth in financial resources.

What Could Change the Rating UP

Significant growth in the University's financial resource base relative to debt, combined with consistently healthy operating performance, increases in liquidity and student market position strengthening

What Could Change the Rating DOWN

Significant additional borrowing without offsetting resource growth; move to weakened operating deficits; reduction in liquidity relative to demand debt

KEY DATA AND RATIOS (Fall 2010 enrollment and fiscal year 2010 financial data):

FTE Enrollment: 19,655 students

Selectivity: 55%

Matriculation: 10%

Net tuition per student: $21,637

Total financial resources: $445 million

Total direct pro forma debt: $476 million

Total indirect debt: $69 million (based on present value of operating leases)

Expendable financial resources to pro forma direct debt: 0.5 times

Expendable financial resources to operations: 0.32 times

Average three-year operating margin: 2.9%

Monthly liquidity: $163 million

Monthly liquidity to pro forma demand debt: 131%

Monthly days cash on hand: 84 days

RATED DEBT

Convertible Series of 1993, Series A of 2002, Series A of 2003, Series A of 2011: A3

Series 1997, First Series of 1998, Second Series of 1998, Series A of 2005 and Series A of 2007: A3; insured by MBIA now National Public Finance Guarantee rated Baa1

Series B of 2003: A3; Aa3/VMIG 3 (Allied Irish Bank LOC to be refinanced)

Second Series of 2000, Series B of 2002: A3; Aa1/VMIG 1 (Landesbank Baden-Wuerttemberg LOC to be replaced)

Series B of 2007: Aa2/VMIG 1 (Wells Fargo LOC)

Series B of 2005: A3; Aa2/VMIG 1 (TD Bank LOC)

CONTACTS

Drexel University: Eric J. Olson, Drexel University, 215-895-2803

Underwriters: Dean M. Flanagan, Jefferies & Company, Inc., 212-336-7031; Julius Coursey, Wachovia Securities, 267-321-8012

The principal methodology used in this rating was Moody's Rating Approach for Private Colleges and Universities published in September 2002.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's Investors Service considers the quality of information available on the credit satisfactory for the purposes of assigning a credit rating.

Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

Analysts

Dennis M. Gephardt
Analyst
Public Finance Group
Moody's Investors Service

Erin V. Ortiz
Backup Analyst
Public Finance Group
Moody's Investors Service

Contacts

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


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

MOODY'S DOWNGRADES DREXEL UNIVERSITY'S (PA) REVENUE BONDS TO A3 FROM A2 AND ASSIGNS A3 RATING TO SERIES 2011A REVENUE BONDS; OUTLOOK IS STABLE
No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH  CURRENT OPINIONS. MOODY'S INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND  OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES  ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR  PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​​​
Moodys.com