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Rating Action:

Moody's Assigns Provisional Ratings to Inactive HECM RMBS issued by Finance of America HECM Buyout 2020-HB1

13 Feb 2020

New York, February 13, 2020 -- Moody's Investors Service, ("Moody's") has assigned provisional ratings to five classes of residential mortgage-backed securities (RMBS) issued by Finance of America HECM Buyout (FAHB) 2020-HB1. The ratings range from (P)Aaa (sf) to (P)B3 (sf).

The certificates are backed by a pool that includes 1,766 inactive home equity conversion mortgages (HECMs) and 198 real estate owned (REO) properties. The servicer for the deal is Finance of America Reverse LLC (FAR). The complete rating actions are as follows:

Issuer: Finance of America HECM Buyout 2020-HB1

Cl. A, Assigned (P)Aaa (sf)

Cl. M1, Assigned (P)Aa3 (sf)

Cl. M2, Assigned (P)A3 (sf)

Cl. M3, Assigned (P)Baa3 (sf)

Cl. M4, Assigned (P)B3 (sf)

RATINGS RATIONALE

The collateral backing FAHB 2020-HB1 consists of first-lien inactive HECMs covered by Federal Housing Administration (FHA) insurance secured by properties in the US along with Real-Estate Owned (REO) properties acquired through conversion of ownership of reverse mortgage loans that are covered by FHA insurance. If a borrower or their estate fails to pay the amount due upon maturity or otherwise defaults, the sale of the property is used to recover the amount owed. FAR acquired the mortgage assets from Ginnie Mae sponsored HECM mortgage backed (HMBS) securitizations. All of the mortgage assets are covered by FHA insurance for the repayment of principal up to certain amounts. There are 1,964 mortgage assets with a balance of $373,912,149. The assets are in default, due and payable, bankruptcy, foreclosure or REO status. Loans that are in default may move to due and payable; due and payable loans may move to foreclosure; and foreclosure loans may move to REO. 24.3% of the assets are in default of which 0.3% (of the total assets) are in default due to non-occupancy, 23.3% (of the total assets) are in default due to taxes and insurance. 16.4% of the assets are due and payable, 43.1% of the assets are in foreclosure and 6.1% were in bankruptcy status. Finally, 10.1% of the assets are REO properties and were acquired through foreclosure or deed-in-lieu of foreclosure on the associated loan. If the value of the related mortgaged property is greater than the loan amount, some of these loans may be settled by the borrower or their estate.

In addition, there are 168 loans that are Optional Delay Mortgages in the pool (7.6% by asset balance), that have remained in the same liquidation status since the first half of 2018 or earlier. Based on HUD rules, servicers may delay calling loans due and payable if the total amount owed for missed taxes and insurance is less than $2,000 and meet certain criteria. We believe such loans could remain in the pool for a significant period of time without liquidating and may experience large losses, in cases where UPB is greater than MCA, if they eventually cure and get assigned to HUD. HUD only reimburses mortgagees up to 100% of the MCA no matter what the UPB is when the loan becomes eligible for assignment to HUD. Therefore, if the UPB is greater than the MCA at the time of assignment, there will be a loss. This risk is present in all inactive HECMs but is a particular concern for Optional Delay Mortgages because these loans are likely to cure from default only after a significant delay, at which point their UPB could be far greater than their MCA due to negative amortization.

It is highly likely that such loans will not proceed to foreclosure and that the loans will not be liquidated until the borrower or borrowers die. As such, there is a significant likelihood that no proceeds will be received on certain of these loans within the ten year stated final maturity of the transaction. Due to the high likelihood that no proceeds will be received for Optional Delay Mortgages within the next 10 years, we did not give credit to such loans in our rating analysis.

Compared to other inactive HECM transactions rated by Moody's, FAHB 2020-HB1 has a significantly higher concentration of mortgage assets in Puerto Rico at 23.2%. Puerto Rico HECMs pose additional risk due to the poor state of the Puerto Rico economy, the uncertainty in the housing market, the aftermath of Hurricane Maria that led to a population outflow, and the bureaucratic foreclosure process. In addition, Puerto Rico has a tax exoneration policy that exempts many seniors from property taxes. Due to the territory's bureaucratic tax exoneration process, it may require a significant amount of time to liquidate Puerto Rico HECMs with tax delinquencies. In addition, there has been a three month moratorium placed on mortgage loans in light of the series of earthquakes that occurred in December 2019 and January 2020. We applied additional stress in our analysis to account for the risk posed by properties in Puerto Rico.

Although FAHB 2020-HB1 is similar to FASST 2019-HB1, there are some key differences.

• At least 2.9% of the UPB is expected to be deposited into the trust by the seller as of the closing due to pre-closing collections and prepayments. We took this into consideration in our cash-flow assumptions.

• Servicing fee of $50 per month per mortgage loan will be paid to the servicer on top of the waterfall before payment to the noteholders. Of note, in FASST 2019-HB1 transaction servicing fee was subordinated to payments to the noteholders. We believe that the subordination of servicing fees along with servicing advances and MIP payments helps to align the interests of deal parties and the investors. Even though servicing fee will be paid on top of the waterfall, we believe the subordination of servicing advances and MIP payments will still be significant to ensure alignment of interest.

• Workout incentive amount: With respect to mortgage loans and REO properties that are located in Puerto Rico, approximately 13.76% of the collections in each period will first be used to reimburse the servicer for servicing advances and principal advances and any remaining amount will be included in the available funds. This feature will further reduce the economic subordination of the servicer. However, we believe that the workout incentive amount will not be sufficient to reimburse all advances and a significant portion of advances will still be subordinated. On the other hand, this feature would to some extent serve as an incentive to workout the Puerto Rico loans at the earliest in order for the servicer to have their advances reimbursed. As of the cut-off date, the total workout incentive amount is about 3.2% of the total UPB. Of note, we took into consideration significant Puerto Rico concentration and increased our rating stresses for Puerto Rico loans.

• In December 2019 and January 2020 a series of earthquakes occurred in Puerto Rico. Approximately 95 of the mortgaged properties are located in geographic regions that have been identified by FEMA as affected by such earthquakes as of February 5, 2020. The servicer had ordered post disaster inspection (PDI) report on 53 properties as of February 4, 2020, and no damages were identified on 52 out of 53 properties. One property had damage reported but the damage was covered in full by a hazard insurance policy. For all other properties identified by FEMA, the servicer will order PDI within six months from the closing date. The seller will make an indemnity payment or will be obligated to cure if damages are reported in the PDI, and such properties are not covered by full insurance and the damages will adversely affect the value or marketability of the mortgaged property.

Our credit ratings reflect state-specific foreclosure timeline stresses as well as potential extended timelines for loans in bankruptcy.

Servicing

Finance of America Reverse LLC (FAR) will be the named servicer under the sale and servicing agreement. FAR has the necessary processes, staff, technology and overall infrastructure in place to effectively oversee the servicing of this transaction. FAR will use Compu-Link Corporation, d/b/a Celink (Celink) as sub-servicer to service the mortgage assets. Based on an operational review of FAR, it has strong sub-servicing monitoring processes, a seasoned servicing oversight team and direct system access to the sub-servicer core systems.

Transaction Structure

The securitization has a sequential liability structure amongst six classes of notes with structural subordination. All funds collected, prior to an acceleration event, are used to make interest payments to the notes, then principal payments to the Class A notes, then to a redemption account until the amount on deposit in the redemption account is sufficient to cover future principal and interest payments for the subordinate notes up to their expected final payment dates. The subordinate notes will not receive principal until the beginning of their respective target amortization periods (in the absence of an acceleration event). The notes benefit from structural subordination as credit enhancement and an interest reserve account for liquidity and credit enhancement.

The transaction is callable on or after six months with a 1.0% premium and on or after 12 months without a premium. The mandatory call date for the Class A notes is in Feburary 2022. For the Class M1 notes, the expected final payment date is in June 2022. For the Class M2 notes, the expected final payment date is in October 2022. For the Class M3 notes, the expected final payment date is in Feburary 2023. For the Class M4 notes, the expected final payment date is in August 2023. For the Class M5 notes, the expected final payment date is in June 2024. For each of the subordinate notes, there are various target amortization periods that conclude on the respective expected final payment dates. The legal stated maturity of the transaction is 10 years.

Available funds to the transaction are expected to primarily come from the liquidation of REO properties and receipt of FHA insurance claims. These funds will be received with irregular timing. In the event that there are insufficient funds to pay interest in a given period, the interest reserve account may be utilized. Additionally, any shortfall in interest will be classified as a cap carryover. These cap carryover amounts will have priority of payments in the waterfall and will also accrue interest at the respective note rate.

Certain aspects of the waterfall are dependent upon FAR remaining as servicer. Servicing fees and servicer related reimbursements are subordinated to interest and principal payments while FAR is servicer. However, servicing advances (i.e. taxes, insurance and property preservation) will instead have priority over interest and principal payments in the event that FAR defaults and a new servicer is appointed. The transaction provides a strong mechanism to ensure continuous advancing for the assets in the pool. Specifically, if the servicer fails to advance and such failure is not remedied for a period of 15 days, the sub-servicer can fund their advances from collections and from an interim advancing reserve account. Given the significant amount of advancing required to service inactive HECMs with tax delinquencies, this provision helps to minimize operational disruption in the event FAR encounters financial difficulties.

Our analysis considers the expected loss to investors by the legal final maturity date, which is ten years from closing, and not by certain acceleration dates that may occur earlier. We noted the presence of automatic acceleration events for failure to pay the Class A notes by the Class A mandatory call date, failure to pay the classes of Class M notes by their expected final payment dates, and the failure to pay the classes of Class M notes their targeted amortization amounts. The occurrence of any of these acceleration events would not by itself lead us to bring the outstanding rating to a level consistent with impairment, because such event would not necessarily be indicative of any economic distress. Furthermore these acceleration events lack effective legal consequences other than changing payment priorities and interest rates, which are modeled in our analysis. Liquidation of the collateral would require 100% consent of any class of notes that would not be paid in full.

Third-Party Review

Similar to FASST 2019-HB1 deal, in FAHB 2020-HB1 a firm of independent accountants or a due-diligence review firm experienced in validation and auditing of reporting of similar assets (the verification agent) will perform quarterly procedures with respect to the monthly servicing reports delivered by the servicer to the trustee. These procedures will include comparison of the underlying records relating to the subservicer's servicing of the loans and determination of the mathematical accuracy of calculations of loan balances stated in the monthly servicing reports delivered to the trustee. Any exceptions identified as a result of the procedures will be described in the verification agent's report. To the extent the verification agent identifies errors in the monthly servicing reports, the servicer will be obligated to correct them.

A third party firm conducted a review of certain characteristics of the mortgage assets on behalf of FAR. The review focused on data integrity, FHA insurance coverage verification, accuracy of appraisal recording, accuracy of occupancy status recording, borrower age documentation, identification of excessive corporate advances, documentation of servicer advances, and identification of tax liens. Also, broker price opinions (BPOs) were ordered for 293 properties in the pool.

The TPR firm conducted an extensive data integrity review. Certain data tape fields, such as the MIP rate, the current UPB, current interest rate, and marketable title date were reviewed against FAR's servicing system. However, a significant number of data tape fields were reviewed against imaged copies of original documents of record, screen shots of HUD's HERMIT system, or HUD documents. Some key fields reviewed in this manner included the original note rate, the debenture rate, foreclosure first legal date, and the called due date.

We accounted for the additional risk in our analysis associated with taxes and insurance exceptions and the foreclosure and bankruptcy fee exceptions.

Reps & Warranties (R&W)

FAR is the loan-level R&W provider and is unrated. This risk is mitigated by the fact that a third-party due diligence firm conducted a review on the loans for evidence of FHA insurance.

FAR represents that the mortgage loans are covered by FHA insurance that is in full force and effect. FAR provides further R&Ws including those for title, first lien position, enforceability of the lien, regulatory compliance, and the condition of the property. FAR provides a no fraud R&W covering the origination of the mortgage loans, determination of value of the mortgaged properties, and the sale and servicing of the mortgage loans. Although certain representations are knowledge qualified, the transaction documents contain language specifying that if a representation would have been breached if not for the knowledge qualifier then FAR will repurchase the relevant asset as if the representation had been breached.

Upon the identification of an R&W breach, FAR has to cure the breach. If FAR is unable to cure the breach, FAR must repurchase the loan within 90 days from receiving the notification. We believe the absence of an independent third party reviewer who can identify any breaches to the R&W makes the enforcement mechanism weak in this transaction. Also, FAR, in its good faith, is responsible for determining if a R&W breach materially and adversely affects the interests of the trust or the value the collateral. This creates the potential for a conflict of interest.

When analyzing the transaction, we reviewed the transaction's exposure to large potential indemnification payments owed to transaction parties due to potential lawsuits. In particular, we assessed the risk that the acquisition trustee would be subject to lawsuits from investors for a failure to adequately enforce the R&Ws against the Seller. We believe that FAHB 2020-HB1 is adequately protected against such risk in part because a third-party data integrity review was conducted on a significant random sample of the loans. In addition, the third-party due diligence firm verified that all of the loans in the pool are covered by FHA insurance.

Trustees

The acquisition and owner trustee for the FAHB 2020-HB1 transaction is Wilmington Savings Fund Society, FSB. The paying agent and cash management functions will be performed by U.S. Bank National Association. U.S. Bank National Association will also serve as the claims payment agent and as such will be the HUD mortgagee of record for the mortgage assets in the pool.

Methodology

The methodologies used in these ratings were " Non-Performing and Re-Performing Loans Securitizations Methodology" published in January 2020 and " Reverse Mortgage Securitizations Methodology" published in November 2019. Please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

Our quantitative asset analysis is based on a loan-by-loan modeling of expected payout amounts and timing of payouts given the structure of FHA insurance and with various stresses applied to model parameters depending on the target rating level. However, the modeling assumptions are different for the Puerto Rico portion of the pool and the portion of the pool that are in bankruptcy.

FHA insurance claim types: Funds come into the transaction primarily through the sale of REO properties and through FHA insurance claim receipts. There are uncertainties related to the extent and timing of insurance proceeds received by the trust due to the mechanics of the FHA insurance. HECM mortgagees may suffer losses if a property is sold for less than its appraised value.

The amount of insurance proceeds received from the FHA depends on whether a sales based claim (SBC) or appraisal based claim (ABC) is filed. SBCs are filed in cases where the property is successfully sold within the first six months after the servicer has acquired it. ABCs are filed six months after the servicer has obtained marketable title if the property has not yet been sold. For an SBC, HUD insurance will cover the difference between (i) the loan balance and (ii) the higher of the sales price and 95.0% of the latest appraisal, with the transaction bearing losses if the sales price is lower than 95.0% of the latest appraisal. For an ABC, HUD only covers the difference between the loan amount and 100% of the appraised value, so failure to sell the property at the appraised value results in loss.

We expect ABCs to have higher levels of losses than SBCs. The fact that there is a delay in the sale of the property usually implies some adverse characteristics associated with the property. FHA insurance will not protect against losses to the extent that an ABC property is sold at a price lower than the appraisal value taken at the six month mark of REO. Additionally, ABCs do not cover the cost to sell properties (broker fees) while SBCs do cover these costs. For SBCs, broker fees are reimbursable up to 6.0% ordinarily. Our base case expectation is that properties will be sold for 13.5% less than their appraisal value for ABCs. To make this assumption, we considered industry data and the historical experience of FAR. We stressed this percentage at higher credit rating levels. In a Aaa scenario, we assumed that these ABC appraisal haircuts could reach up to 30.0%.

In our asset analysis, we also assumed there would be some losses for SBCs, albeit lower amounts than for ABCs. Based on historical performance, in the base case scenario we assumed that SBCs would suffer 1.0% losses due to a failure to sell the property for an amount equal to or greater than 95.0% of the most recent appraisal. We stressed this percentage at higher credit rating levels. In a Aaa scenario, we assumed that SBC appraisal haircuts could reach up to 11.0% (i.e., 6.0% below 95.0%).

Under our analytical approach, each loan is modeled to go through both the ABC and SBC process with a certain probability. Each loan will thus have both ABC and SBC sales disposition payments and associated insurance payments (four payments in total). All payments are then probability weighted and run through a modeled liability structure. We considered industry data and the historical experience of FAR in our analysis. For the base case scenario, we assumed that 85% of claims would be SBCs and the rest would be ABCs. We stressed this assumption and assumed higher ABC percentages for higher rating levels. At a Aaa rating level, we assumed that 85% of insurance claims would be submitted as ABCs.

Liquidation process: Each asset is categorized into one of four categories: default, due and payable, foreclosure and REO. In our analysis, we assume loans that are in referred status to be either in the foreclosure or REO category. The loans are assumed to move through each of these stages until being sold out of REO. We assumed that loans would be in default status for six to nine months depending on the default reason. Due and payable status is expected to last six to 12 months depending on the default reason. REO disposition is assumed to take place in six months for SBCs and 12 months for ABCs.

The timeline for foreclosure status is based on the state in which the related property is located. To arrive at the base case foreclosure timeline, we considered the FHA foreclosure diligence time frames (per HUD guidelines as of February 5, 2016). We stress state foreclosure timelines by a multiplicative factor for various rating levels (e.g., state foreclosure timelines are multiplied by 1.6x for our Aaa level rating stress).

Debenture interest: The receipt of debenture interest is dependent upon performance of certain actions within certain timelines by the servicer. If these timeline and performance benchmarks are not met by the servicer, debenture interest is subject to curtailment. Our base case assumption is that 90.0% of debenture interest will be received by the trust. We stressed the amount of debenture interest that will be received at higher rating levels. Our debenture interest assumptions reflect the requirement that FAR reimburse the trust for debenture interest curtailments due to servicing errors or failures to comply with HUD guidelines. However, the transaction documents do not specify a required time frame within which the servicer must reimburse the trust for debenture interest curtailments. As such, there may be a delay between when insurance payments are received and when debenture interest curtailments are reimbursed. Our debenture interest assumptions take this into consideration. Our assumption for recovered debenture interest is low compared to prior FASST transactions due to the relatively high percentage of missed servicing milestone mortgage assets in the pool.

Additional model features: We incorporated certain additional considerations into our analysis, including the following:

• In most cases, the most recent appraisal value was used as the property value in our analysis. However, for seasoned appraisals we applied a 15.0% haircut to account for potential home price depreciation between the time of the appraisal and the cut-off date.

• Mortgage loans with borrowers that have significant equity in their homes are likely to be paid off by the borrowers or their heirs rather than complete the foreclosure process. We estimated which loans would be bought out of the trust by comparing each loan's appraisal value (post haircut) to its UPB.

• We assumed that foreclosure costs will average $4,500 per loan, two thirds of which will be reimbursed by the FHA. We then applied a negative adjustment to this amount based on the TPR results.

• We estimated monthly tax and insurance advances based on cumulative tax and insurance advances to date.

We also ran additional stress scenarios that were designed to mimic expected cash flows in the scenario where FAR is no longer the servicer. We assumed the following in such a scenario:

• Servicing advances and servicing fees: while FAR subordinates their recoupment of servicing advances, servicing fees, and MIP payments; a replacement servicer will not subordinate these amounts.

• FAR indemnifies the trust for lost debenture interest due to servicing errors or failure to comply with HUD guidelines. In an event of bankruptcy, FAR will not have the financial capacity to do so.

• One third of foreclosure costs will be removed from sales proceeds to reimburse a replacement servicer for such advances (one third of foreclosure costs are not reimbursable under FHA insurance). This is typically on the order of $1,500 per loan.

Furthermore, to account for risks posed by Puerto Rico loans, we considered the following for mortgage assets backed by properties in Puerto Rico:

• To account for delays in the foreclosure process in Puerto Rico due to the hurricanes, we used five years as our full stress foreclosure timeline and scaled the impact down the rating levels.

• We assumed that all insurance claims would be submitted as ABCs under our Aaa rating stress and scaled this percentage down at lower rating levels. In addition, for ABCs we assumed that properties will sell for significantly lower than their appraised values.

• Due to the significant Puerto Rico concentration for this transaction, we also applied haircuts to the modeled cash flows for Puerto Rico mortgage assets.

To account for potential extension of timelines due to Chapter 13 bankrupt loans, we extended the foreclosure timeline by an additional 24 months in the base case scenario and scaled this extension up for higher rating levels.

Factors that would lead to an upgrade or downgrade of the ratings:

Up

Levels of credit protection that are higher than necessary to protect investors against current expectations of stress could drive the ratings up. Transaction performance depends greatly on the US macro economy and housing market. Property markets could improve from our original expectations resulting in appreciation in the value of the mortgaged property and faster property sales.

Down

Levels of credit protection that are insufficient to protect investors against current expectations of stresses could drive the ratings down. Transaction performance depends greatly on the US macro economy and housing market. Property markets could deteriorate from our original expectations resulting in depreciation in the value of the mortgaged property and slower property sales.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions of the disclosure form.

Further information on the representations and warranties and enforcement mechanisms available to investors are available on http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_1214310 .

In rating this transaction, Moody's used a cash flow model to model cash flow stress scenarios to determine the extent to which investors would receive timely payments of interest and principal in the stress scenarios, given the transaction structure and collateral composition.

Moody's quantitative analysis entails an evaluation of scenarios that stress factors contributing to sensitivity of ratings and take into account the likelihood of severe collateral losses or impaired cash flows.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Siva Ranjani Mettapalayam Pannir Selvam
Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Sonny Weng
Vice President - Senior Analyst
Structured Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

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.

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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.

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