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.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

MOODY'S DOWNGRADES VERIZON TO A3, PRIME-2; DOWNGRADES ALL VZ WIRELINE SUBS.; UPGRADES MCI TO Ba3; PLACES A3 RATING OF VZ WIRELESS ON REVIEW FOR POSSIBLE UPGRADE; RATINGS OUTLOOKS ON PARENT, WIRELINE SUBS AND MCI ARE STABLE

21 Dec 2005
MOODY'S DOWNGRADES VERIZON TO A3, PRIME-2; DOWNGRADES ALL VZ WIRELINE SUBS.; UPGRADES MCI TO Ba3; PLACES A3 RATING OF VZ WIRELESS ON REVIEW FOR POSSIBLE UPGRADE; RATINGS OUTLOOKS ON PARENT, WIRELINE SUBS AND MCI ARE STABLE

Approximately $45 Billion of Debt Securities Affected.

New York, December 21, 2005 -- Moody's Investors Service has downgraded the long- and short-term debt ratings of Verizon Communications Inc. (VZ or Verizon) to A3 and Prime-2, from A2 and Prime-1, respectively, reflecting the likely pressure on cash flows arising from the company's plan to upgrade its local wireline network with fiber-to-the-premises (FTTP or FiOS) over the next several years. Moody's has also lowered the ratings of the individual wireline operating companies to reflect expected pressure on their operating and financial profiles from competition, combined with the costs of the network upgrade. Moody's upgraded MCI's long-term debt ratings to Ba3 from B2 based on expected synergy benefits resulting from its acquisition by Verizon, as well as Verizon's likely willingness to financially support MCI, should it be required. The A3 long-term debt rating of Verizon Wireless (VZW) was placed on review for possible upgrade reflecting Moody's expectation that continued strong revenue growth, an excellent cost structure, and very low churn will lead to steadily improving earnings and cash flows, which, in combination with a very significant change in its earnings distribution policy, will allow Verizon Wireless to delever rapidly.

These actions resolve the reviews, initiated on February 14, 2005 when Verizon announced its plan to acquire MCI for about $8.9 billion in cash, stock and assumed debt. The complete list of rating actions follows at the end of the press release. The outlooks for the ratings of VZ and its wireline operating companies are stable.

Rationale for downgrade of Verizon Communications ratings

The downgrade of Verizon's rating reflects the agency's view that Verizon's strategy of deploying fiber-to-the-premises in order to meet increased competition in providing wireline services to the residential market , while technologically robust, will require significant upfront cost, weakening VZ's financial metrics over the intermediate term in exchange for highly uncertain returns. Moody's expects this deployment to significantly reduce dividends from the wireline companies to the parent company for debt service, which, when coupled with the competitive pressures on wireline revenues, motivated the rating downgrade.

Moody's concerns center around the high cost and relatively slow pace of VZ's FiOS deployment. Moody's projects it will about 10 years to pass approximately 30 million households, which increases the risk of losing residential telephony share to cable companies, who Moody's expects will be able to offer a facilities-based bundle at cost competitive prices to almost all of Verizon's customers within the next three years. In addition, the expense of the full fiber buildout will pressure near-term credit metrics. Moody's estimates that Verizon's cost to pass a home with fiber will average about $750, three times what the alternative fiber-to-the-node strategy costs.

Overall business risk is increasing rapidly with accelerating local access line losses and a shift in its asset base and investment needs toward highly competitive business segments like video, broadband, corporate data, and wireless. Furthermore, Moody's views the threat to VZ's core residential wireline cash flow stream from cable competition as significant.

Moody's recognizes the company's decisions to upgrade its networks, enhance and diversify its consumer revenue streams (through long distance, broadband, wireless and video service offerings) and accelerate the development of its enterprise service business as strategically appropriate, in light of this threat. Over time, Moody's believes that the FiOS build-out may be the most robust technological means to compete against cable competition. It has the potential to generate significant new revenues from video and higher speed data offerings and it may ultimately lower ongoing network operating costs by about 50%. VZ's execution risk is still substantial, however, with the fixed income investor shouldering most of the downside risk.

Moody's believes the potential acquisition of MCI will not materially weaken Verizon's consolidated credit metrics because of MCI's relatively small size and the expectation that most of the anticipated revenue and cost synergies will be achieved close to schedule. The acquisition jumpstarts Verizon's efforts to compete in the large, growing and profitable enterprise space. It also diversifies Verizon's revenue stream, providing it with a solid foundation in the enterprise market from which to grow its enterprise business.

Verizon's rating is supported by Moody's assessment that continued strong growth of earnings and cash flows from Verizon Wireless will offset lower dividend payments from the wireline subsidiaries. Moody's believes that VZ will receive significant cash from VZW over the next few years as VZW utilizes the bulk of its growing free cash flow to repay about $15B of intercompany borrowings from Verizon.

Moody's expects consolidated debt levels to rise about $3.0 billion in 2006, as VZ absorbs MCI and increases network spending on its FiOS deployment. In 2007, Moody's believes that VZ will generate about $25 billion of cash from operations (after Moody's standard adjustments) and about $2.0 billion of free cash flow, and expects VZ to use this cash flow to reduce about $40 billion of debt (estimated pre-MCI acquisition for FYE2005 to include VZ plus 55% of Verizon Wireless' external debt).

Moody's expects 2007 (proportionate for 55% of Verizon Wireless) debt/EBITDA to above 1.5X, retained cash flow to debt to be below 30%, and (EBITDA-capital expenditures)/interest to be about 4.0X. VZ pays a significant portion of its cash flow in dividends, which reduces cash flow available for debt repayment.

Moody's considers the potential proceeds from any sale or spin-off of the directories business a potentially significant source of financial flexibility if proceeds are applied to strategic investments or debt reduction. However, the loss of this very high margin business and its relatively significant and predictable earnings and cash flows would have negative impact on Verizon's rating should the company return the bulk of the proceeds to shareholders.

Rationale for placing debt rating of Verizon Wireless on review for possible upgrade

Moody's review for possible upgrade of Verizon Wireless's ratings reflects the agency's expectation for continued strong revenue growth, an excellent cost structure, and very low churn should lead to steadily improving earnings and cash flows; which, in combination with a very significant change in its earnings distribution policy, should allow Verizon Wireless to delever rapidly.

The review of VZW will focus on: 1) the company's ability to sustain earnings and cash flow growth rates in the face of fortified competitors; 2) the timing and magnitude of the expected strengthening of VZW's balance sheet given growing capex spending needs and the possibility of additional spectrum purchases, and 3) Moody's assessment of the timing of a possible unwinding of the Verizon Wireless partnership and its impact on the balance sheets of both Verizon Wireless and Verizon Communications.

Rationale for upgrade of MCI's ratings

The upgrade to Ba3 of MCI's debt ratings represents Moody's view that the synergy benefits expected from its acquisition by Verizon as well as Moody's perception of Verizon's likely willingness to financially support MCI (should it be required) merits a two-notch upgrade of MCI's standalone rating. We expect the MCI notes will be refinanced at the Verizon Global Funding (VZGF) level shortly after the merger closes.

Moody's believes that VZ will focus on generating multi-billion dollar expense savings and increased revenue once its acquisition of MCI closes. The agency regards these plans as achievable, in the most part, because of obvious redundancies, network integration opportunities and Verizon's past experience in integrating significant acquisitions. Owning MCI's extensive long distance network should improve VZ's cost structure in relation to its own long distance, broadband and even wireless long-haul transport needs. We expect that the benefits will ramp up over time as investments and expenses (i.e. severance) necessary to achieve the synergies is front loaded. Moody's recognizes the benefits to VZ of acquiring a stronger player in the enterprise market through the purchase of MCI, and the benefits to all the established players from in-market consolidation.

Underpinnings of the stable outlook at Verizon

The stable outlook at the parent is based on Moody's expectations that improving profitability at Verizon Wireless, as long as Verizon captures the vast majority of the cash flows from Verizon Wireless, will partially offset the effects of expanding wireline competition and an expensive network upgrade.

The ratings could come under additional pressure if: 1) VZ's acquisition of MCI fails to produce significant synergy benefits; 2) Verizon Wireless' operating performance falters; 3) revenue declines at VZ's wireline operations accelerate or if margins decline; 4) VZ consolidates its ownership of Verizon Wireless or makes a material acquisition or a sale of operations in a manner that causes a deterioration in projected credit metrics, or 5) the cost of the fiber build-out exceeds current estimates or if it falls significantly behind schedule.

The ratings could be upgraded if VZ were to demonstrate sustainable material top line growth in its consolidated wireline businesses while maintaining margins and Verizon Wireless were to sustain above industry average operating performance (subscriber additions, churn, margins), coupled with a demonstrated willingness by management to manage Verizon's capital structure to stronger credit metrics than Moody's currently expects. If VZ can drive significant revenue growth and profitablility through the deployment of FiOS, ratings are likely to improve.

Rationale for ratings downgrades of the wireline operating companies

Moody's lowered the ratings of all VZ's operating companies (in some cases several notches): Verizon -- New England (A3/Baa1 from A2/A3), Verizon -- New York (Baa3 from Baa2), Verizon-New Jersey (A3 from A1), Verizon-Pennsylvania (A3 from A1), Verizon-Virginia (Baa1 from A1), Verizon-Florida (Baa1 from A1), ( Verizon-Maryland (A3 from A1), Verizon-Delaware (A3 from Aa3), Verizon-West Virginia (A3 from Aa3) Verizon- South (Baa1 from A2), Verizon-North (A3 from A1), GTE -- Southwest (Baa2/Baa1 from A3/A2), Verizon-Northwest (A3 from A1) and Verizon-California (A3 from A1). Moody's believes the funding strategy for Verizon's operating companies, in light of the very expensive FiOS buildout being undertaken at the operating company level, weakens their individual credit quality to no stronger than the corporate family as a whole. Verizon's financial strategy of managing cash flow at its operating subsidiaries (whether through intercompany loans or dividend policy) limits the ability of the individual operating companies to materially reduce debt. All the operating companies, with the exception of Verizon-West Virginia, have experienced very large (on average 40%) year-over-year increases in capital spending as a result of Verizon's decision to upgrade its local networks to fiber-to-the-premises. Consequently, the pre-dividend free cash flow generating ability of the operating companies has greatly diminished.

Further rationale for operating companies ratings below the parent ratings

The downgrade of the ratings on Verizon-Virginia, Verizon-Florida and Verizon-South to Baa1, as well as the downgrade of GTE-Southwest's senior unsecured ratings to Baa2, also incorporates Moody's belief that these companies are more likely to rely on parent company support given their relatively weaker financial metrics and operating performances. In the case of Verizon-Virginia and Verizon-South, the dramatic acceleration of line losses indicates intensifying competition.

The downgrade of the long-term debt rating of GTE-Southwest to Baa2 also reflects above-average access line losses, weak asset returns coupled with a relatively high cost structure, and among the most leveraged balance sheets in the family.

The ratings of Verizon-New York and Verizon-New England were historically the lowest of the ILEC's, given their weak operating performance. Consequently, Moody's downgraded these companies only one notch (long-term ratings of Verizon-New York to Baa3 and the long-term guaranteed and unguaranteed debt ratings of Verizon-New England to A3 and Baa1, respectively) given the agency's current view on VZ's financial strategy.

Moody's believes that the steps Verizon-New York has taken to generate free cash flow by eliminating upstream dividends to its parent, and to substitute intra-company debt for external debt, provide the company with some operating cushion at its current rating level. Nonetheless, Moody's expects that Verizon-NY's free cash flow will remain under considerable pressure for some time, given the likelihood that access line losses will continue to drive lower revenues, that much of the company's cost structure is fixed, and that it faces the expense of a significant network upgrade.

Relatively weak return on assets and significantly underfunded pension obligations also pressures the ratings of Verizon-New York and Verizon-New England. While Moody's notes the progress that these companies have made curbing revenue loss and improving EBITDA margins, Moody's believes that accelerating access line losses will challenge the sustainability of this trend.

Underpinnings of the stable outlook at Verizon's wireline operating companies

The stable outlooks for ratings at the wireline subsidiaries are based on Moody's expectation that the steps that Verizon has taken to shore up the credit quality at the various operating subsidiaries, including significant reductions in dividends to Verizon Communications, and the substitution of inter-company loans for external debt will offset, at least for the next 12 to 18 months, expected additional earnings and cash flows pressures at the operating companies.

Verizon's method for funding its operating companies has changed over time. All maturing debt and new capital needs at the operating companies is now funded with inter-company borrowings, rather than external debt. While these inter-company notes rank pari passu with external debt, Moody's believes that this financing arrangement indicates relatively strong parental support for these subsidiaries and gives most of the wireline subsidiaries several notches of rating lift.

However, should Verizon once again choose to finance these subsidiaries with any new external debt, it is very likely that the ratings at those subsidiaries would fall by several notches to levels that solely reflect their individual, stand-alone credit quality.

A possible sale, spinoff or divestiture of assets could also affect the ratings of all operating companies.

The ratings of Verizon's operating companies could come under additional pressure if: 1) revenue declines accelerate to close to 5% annually; or 2) the Fiber-to-the-Premise (FTTP) network upgrade does not, over-time, significantly lower costs, support new revenue streams and lead to increases in cash flow. Annual access line losses persistently above 10% could further pressure all ILEC ratings. The operating companies' ratings could also fall further if Moody's downgrades Verizon Communications' senior unsecured rating.

Complete list of rating actions:

Ratings downgraded are:

Verizon Global Funding Corp.: issuer rating to A3 from A2 and short-term debt rating to Prime-2 from Prime-1

Verizon Network Funding: short-term to Prime-2 from Prime-1

NYNEX Corporation: senior unsecured to A3 from A2

GTE Corporation: senior unsecured to Baa1 from A3

Verizon New York, Inc.: notes and debentures to Baa3 from Baa2

Verizon New England, Inc.: notes and debentures to Baa1 from A3, except the $480M of Series B debentures, due 2042, which are downgraded to A3 from A2 based on unconditional and irrevocable guarantee from Verizon Communications

Verizon Delaware, Inc.: debentures to A3 from Aa3

Verizon West Virginia, Inc.: debentures to A3 from Aa3

Verizon New Jersey, Inc.: debentures to A3 from A1

Verizon Pennsylvania, Inc.: debentures to A3 from A1

Verizon Maryland, Inc.: debentures to A3 from A1

Verizon North, Inc.: debentures to A3 from A1

Verizon Northwest, Inc.: debentures to A3 from A1

Verizon California, Inc.: debentures to A3 from A1

Verizon Virginia, Inc.: notes and debentures to Baa1 from A1

Verizon Florida, Inc.: debentures to Baa1 from A1

Verizon South, Inc.: debentures to Baa1 from A2 except the $300M of Series F debentures, due 2041, which are downgraded to A3 from A2 based on unconditional and irrevocable guarantee from Verizon Communications

GTE Southwest, Inc.: first mortgage bonds to Baa1 from A2, notes and debentures to Baa2 from A3

Ratings upgraded:

MCI, Inc.: Corporate Family to Ba3 from B2; Senior Notes to Ba3 from B2

Ratings placed on review for possible upgrade:

Verizon Wireless Capital, LLC: A3 senior unsecured

Please refer to Moodys.com for additional research.

Verizon Communications is a regional Bell operating carrier, headquartered in New York City. MCI Inc. is a global telecommunications provider headquartered in Ashburn, VA.

New York
Dennis Saputo
Senior Vice President
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Julia Turner
Managing Director
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

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