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
Está por salir del sitio local de España y comenzará a navegar en el sitio global. ¿Desea continuar?
No mostrar este mensaje nuevamente
Si
No
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”, 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 information that becomes accessible to you (the “Information”). References herein to “Moody’s” include Moody’s Corporation. and each of its subsidiaries and affiliates..

 

Terms of One-Time Website Use

 

1.             Unless you have entered into an express written contract with www.moodys.com to the contrary and/or agreed to the Terms of Use at www.moodys.com or ratings.moodys.com, 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.             CREDIT RATINGS AND MOODY’S MATERIALS FOUND ON WWW.MOODYS.COM OR SITES OTHER THAN RATINGS.MOODYS.COM MAY NOT BE DISPLAYED IN REAL TIME. FOR REAL-TIME DISPLAYS OF CREDIT RATINGS AND OTHER INFORMATION REQUIRED TO BE DISCLOSED BY MIS PURSUANT TO APPLICABLE LAW OR REGULATION, PLEASE USE RATINGS.MOODYS.COM.           

 

3.             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.

 

4.             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.     

 

5.             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.​​​

 

6.             You agree that any disputes relating to this agreement or your use of the Information, whether 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 affirms Bermuda's A2 ratings; maintains a stable outlook

05 Jun 2020

New York, June 05, 2020 -- Moody's Investors Service, ("Moody's") today affirmed the Government of Bermuda's A2 issuer and senior unsecured bond ratings. The outlook remains stable.

The key drivers behind the rating decision are:

1) Track-record of fiscal consolidation will support debt stabilization after this year's growth shock, with debt metrics remaining in line with similarly rated peers

2) Low susceptibility to event risks, reflecting the country's very strong external position and limited exposure to funding pressures

Over the past several years, Bermuda's economy resumed growth and fiscal consolidation efforts resulted in stable debt metrics. This year, the economy will be hit by coronavirus-related economic shock leading to economic contraction and increase in public debt. Despite its small size, Bermuda's economy has shown resiliency in the face of severe economic stress following the global financial crisis due to very high wealth levels and strong institutions. Moody's expects these features, along with the track record of fiscal consolidation in recent years to support the sovereign's credit profile as the coronavirus crisis abates. Although debt burden will increase this year, Moody's expect the resumption of economic activity next year to stabilize debt metrics close to their 2020 levels.

Bermuda's foreign- and local-currency bond and deposit ceilings remain unchanged. The long-term foreign-currency bond and deposit ceilings remain unchanged at Aa3 and A2, respectively. The short-term foreign-currency bond and deposit ceilings remain at P-1. The long-term local-currency bond and deposit ceilings remain at Aa3.

RATINGS RATIONALE

RATIONALE FOR THE RATING AFFIRMATION AT A2

TRACK-RECORD OF FISCAL CONSOLIDAITON WILL SUPPORT DEBT STABILIZATION AFTER THIS YEAR'S GROWTH SHOCK, WITH DEBT METRICS REMAINING IN LINE WITH PEERS

Bermuda's fiscal consolidation efforts over the past several years, along with a pickup in economic growth resulted in improving fiscal performance and debt stabilizing below 37% of GDP in 2019. The government had a small fiscal deficit of 0.3% of GDP last year, down from a relatively large fiscal deficit of 4.6% of GDP six years earlier.

However, fiscal performance will deteriorate again this year, as a direct result of the coronavirus-related economic shock. The economy will suffer a severe contraction, which Moody's expects will be around 6%. The economic contraction, together with the government's response to increase resources to the healthcare sector and provide unemployment benefit to more than 7,000 people roughly 20% of the working population on the island, will increase the fiscal deficit to 4.2% of GDP, and debt will increase to reach around 42% of GDP in 2020.

Moody's expects an economic recovery next year, which will support fiscal performance in 2021, as emergency spending is rolled back and revenues recover some grounds. The government remains committed to the goal of achieving a balanced budget; however, it will likely take a few years to reach that goal after the crisis recedes. Therefore, debt will likely continue to increase slightly, before stabilizing around 44% of GDP in the next 2-3 years. At that level, Bermuda's debt burden will likely remain in line with the median for A-rated peers. Given the context of the crisis, Bermuda's recent track record of fiscal consolidation and Moody's assessment of relatively strong institutions are key to the agency's baseline scenario of debt stabilizing close to its 2020 level.

In the coming 2-3 years, fiscal performance should be supported by Bermuda's underlying economic strength and recovery in economic activities. Prior to this crisis, Moody's expected growth performance to remain relatively healthy, compared to previous years, supporting a downward trajectory in government debt. The tourism sector and investment in new hotels on the Island were important drivers for improved growth prospects. While the recovery in the tourism sector will likely be gradual, dampening the prospects of strong economic growth next year, Bermuda's exposure to the tourism industry as a source of fiscal revenues is limited. However, tourism's direct and indirect contribution to GDP represent around 18% of GDP, while the sector also employs about 21% of the workforce including tourism-related sectors. As a result, the hit to the tourism sector will contribute to this year's contraction in economic activity. At the same time, the sizable international business sector, which represents about 25% of GDP and includes the insurance and reinsurance industry, will help cushion some of the impact of the current crisis on Bermuda's economy relative to more tourism-dependent economies.

LOW SUSCEPTIBILITY TO EVENT RISKS, REFLECTING THE COUNTRY'S VERY STRONG EXTERNAL POSITION AND LIMITED EXPOSURE TO FUNDING PRESSURES

Bermuda's highly competitive international insurance and reinsurance industries provide the island with steady and large flow of current account surpluses, which leaves Bermuda with a very strong external position, even though the island does not hold official foreign exchange reserves. Over the last decade, the current account surplus averaged 14% of GDP, supported primarily by compensation paid by international businesses. Other important sources of balance of payments receipts include investment income earned by residents and local financial institutions on their overseas investments.

As of the third quarter of 2019, Bermuda's current account recorded a surplus of $251 million, a $17 million increase year-over-year. At the end of the third quarter of 2019, Bermuda's net international investment position stood at $2.4 billion, almost 40% of GDP. The sustainability of the economy's external position will continue to depend primarily on the performance of the international business sector and Bermuda's attractiveness as a hub for international insurance and other financial services. This feature will help insulate Bermuda from the expected decline in tourism sector receipts this year and contribute to a still sizable current account surplus in 2020.

The government has limited exposure to external funding, and its deficit funding needs and debt maturity profile is not a source of vulnerability. Large amortizations are not due until 2023. The government is planning to finance this year's deficit through local banks and will likely tap markets at a later stage, in line with previous liability management operations. In addition, Bermuda's long standing exchange rate peg to the US dollar limits the risk of exchange rate volatility on the sovereign balance sheet.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's assessment of policymakers' continued commitment to a prudent fiscal stance that will contribute to stabilizing Bermuda's debt burden in the next 2-3 years, following the economic shock related to the coronavirus pandemic. Expectation of stable fiscal dynamics post-crisis are balanced against subdued economic recovery due to the slow pick up in the tourism sector, which may impact the pace of fiscal consolidation. Maintaining Bermuda's fiscal and debt metrics in line with A-rated peers is key assumption, supporting the stable outlook.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Environmental risks do not have a material impact on Bermuda's credit profile. The country is located on the periphery of the Atlantic hurricane belt where storms originate. Moreover, Bermuda's higher wealth levels and stronger credit profile support its resilience to longer-term trends of sea-level rises.

There is limited impact of social considerations on Bermuda's credit profile due to its very high wealth level and strong social safety net, minimizing the risk of social tension. However, Bermuda's long-term growth performance will be impacted by declining working-age population due to emigration and aging. Moody's considers the coronavirus outbreak to be a social factor under its ESG framework, given the substantial implications for public health and safety.

Our favorable assessment of Bermuda's institutional framework and governance reflects high scores on the Worldwide Governance Indicators (WGI) on government effectiveness, rule of law ,and regulatory quality. Bermuda has a strong regulatory framework and acts as a global financial center for insurance and reinsurance. Sustained fiscal consolidation efforts supports our assessment of strong policy effectiveness.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

The outlook could change to positive if the government demonstrates its ability to reverse the impact of the coronavirus shock on fiscal metrics and implements revenue measures to achieve fiscal surpluses on a sustained basis to support the sovereign's fiscal strength. Our assessment will also take into account the trajectory of Bermuda's debt metrics, particularly in relation to debt affordability, and evidence that the interest-to-revenue ratio is converging with the level observed for similarly-rated peers.

The outlook could change to negative if fiscal trends deteriorate in the medium-term, beyond the impact of the shock on fiscal performance this year, leading Bermuda's debt metrics to deviate from peers. Persistently weak growth performance, due to a loss which would also have a negative impact on fiscal outcomes and credit prospects.

GDP per capita (PPP basis, US$): 71,682 (2019 Actual) (also known as Per Capita Income)

Real GDP growth (% change): 1.8% (2019 Actual) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 0.5% (2019 Actual)

Gen. Gov. Financial Balance/GDP: -0.3% (2019 Actual) (also known as Fiscal Balance)

Current Account Balance/GDP: 9.9% (2019 Actual) (also known as External Balance)

External debt/GDP: 120.1

Economic resiliency: baa1

Default history: No default events (on bonds or loans) have been recorded since 1983.

On 02 June 2020, a rating committee was called to discuss the rating of the Bermuda, Government of. The main points raised during the discussion were: The issuer's governance and/or management, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has not materially changed. The issuer's susceptibility to event risks has not materially changed.

The principal methodology used in these ratings was Sovereign Ratings Methodology published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1158631. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.

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.

The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.

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

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.

The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.

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.

Samar Maziad
Vice President - Senior Analyst
Sovereign Risk 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

Yves Lemay
MD-Sovereign/Sub Sovereign
Sovereign Risk Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

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.
© 2023 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 CREDIT RATINGS AFFILIATES ARE THEIR 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 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 APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S 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 credit 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 $5,000,000. 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, Inc. 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 — Charter Documents - 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 JPY100,000 to approximately JPY550,000,000.

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