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Rating Action:

Moody's affirms Greek banks' deposit ratings at Caa3; upgrades large banks' senior debt ratings and baseline credit assessment

26 Jun 2017

Rating actions follow Greece's upgrade to Caa2 (positive)

Limassol, June 26, 2017 -- Moody's Investors Service (Moody's) has today affirmed the Caa3 long-term deposit ratings of Alpha Bank AE, Eurobank Ergasias S.A., National Bank of Greece S.A., and Piraeus Bank S.A.. At the same time, Moody's has also upgraded all four banks' baseline credit assessment (BCA) to caa2 from caa3, the long-term senior unsecured ratings to (P)Caa3 from (P)Ca, and the long-term counterparty risk assessment to Caa2(cr) from Caa3(cr). The long-term deposit ratings for Alpha Bank AE and National Bank of Greece S.A. carry positive outlooks, while those of Eurobank Ergasias S.A. and Piraeus Bank S.A. carry stable outlooks. The long-term deposit ratings of Attica Bank S.A. were affirmed at Caa3 with stable outlook, as well as its BCA of caa3, while the bank's counterparty risk assessment was upgraded to Caa2(cr) from Caa3(cr).

These rating actions follow the successful completion of Greece's second review for its support programme, which also triggered an upgrade of Greece's government bond rating to Caa2 (positive) from Caa3 (stable). The higher BCAs primarily reflect the improved operating environment in Greece, which has resulted in Moody's raising the country's Macro Profile to 'Very Weak+' from 'Very Weak', as well as improvements in banks' funding profile, lower funding costs, the return to marginal core profitability and the likely continuation of this trend in 2017-18. In addition, the BCAs also take into account the prospects for further modest improvements in banks' financial fundamentals stemming from the potential return of more deposits into the banking system and gradual reduction of nonperforming loans, as the economy starts to show signs of recovery.

The affirmation of the banks' Caa3 deposit ratings is primarily driven by the rating agency's 'Loss Given Failure' (LGF) analysis of banks' liability structure and the relatively small pool of unsecured liabilities available to absorb losses in a potential bank resolution scenario. The deposit ratings also reflect the on-going deposit controls in Greece, and the fact that depositors do not have instant access to the full amount of their deposits. The banks' senior unsecured ratings were upgraded to (P)Caa3 from (P)Ca based on the full application of the rating agency's LGF analytical approach following the stabilisation of banks' liability structures. Previously these debt ratings were benchmarked at Ca based on expected losses, following the liability management exercises and exchange offers to senior bondholders that banks carried out in late 2015, as part of their last recapitalisation.

Moody's said that its Greek bank ratings balance the improvements in their credit profiles against the still significant downside risks stemming from the fragile operating environment in Greece and the very high level of nonperforming loans.

A full list of affected ratings is provided at the end of this press release.

RATINGS RATIONALE

UPGRADES OF BCAs TO caa2 FROM caa3

The upgrade of the four Greek banks' BCAs to caa2 from caa3 reflects the following factors:

--- GREECE'S MACRO PROFILE CHANGED TO 'VERY WEAK+' FROM 'VERY WEAK'

Following the sovereign rating upgrade, the macro profile for Greece that is used in Moody's banking scorecards that derive the BCAs has been changed to 'Very Weak+' from 'Very Weak', due to the rating agency's improved view of the country's institutional strength factor. This was primarily triggered by the conclusion of the second review of the country's adjustment programme, and the fact that public institutions in Greece have benefited from the technical assistance provided by the official creditors. Greece's macro profile also reflects the difficult credit and funding conditions, with structural challenges faced by all banks.

--- IMPROVED FUNDING PROFILES

The BCA upgrades also reflect the recent improvements in their funding profiles with the reduction of the high cost Emergency Liquidity Assistance (ELA), which was around €41 billion for the system in May 2017, down from €87 billion in June 2015. Moody's expects further reduction in the banks' dependence on ELA, following the conclusion of the second review of the country's support programme by its official lenders (EC/ECB/ESM/IMF). This development should improve confidence in the banks, resulting in gradual deposit inflows from the approximately €10 billion of cash still placed outside the banking system. The rating agency also expects a gradual relaxation of the capital controls that remain in place in Greece, which allow depositors to withdraw only €840 every two weeks. Full repayment of the ELA is one of Greek banks' top priorities, although this is unlikely to materialise for all four banks over the next 12-18 months. The inter-bank repo market has been available to Greek banks so far, allowing them to partly reduce their ELA balances.

--- BETTER PROFITABILITY PROSPECTS

The BCA upgrades also consider the improved earnings prospects for these banks, following the conclusion of the second review, which will likely enhance investor and depositor confidence, reducing funding costs. Concurrently, Moody's expects that lower funding costs and operating expenses will support pre-provision income in 2017-18, and bottom-line profits will be largely driven by the level of provisioning requirements. During 2016, pre-provision income for the banking system increased by around 32% with almost all banks being marginally profitable, limiting any capital consumption, while the first quarter 2017 results suggest that the improving trend will continue in 2017.

Moody's considers that the BCA of caa2 for all four banks appropriately balances these recent improvements in their standalone credit profiles as well as the considerable downside risks stemming from the still high level of non-performing exposures (NPEs) that were at around 45% of total exposures (including off-balance sheet items) as of March 2017. The rating agency believes that over the next 12-18 months, banks' performance will depend on their ability to reduce the level of NPEs mainly through restructurings that will also generate additional income.

ATTICA BANK BCA AFFIRMED AT caa3

Attica Bank's BCA was affirmed at caa3 reflecting the bank's significant asset quality challenges, with the highest NPE ratio among its peers, as well as its ongoing capital needs that have yet to be fully covered. In addition, the bank is currently undergoing restructuring and has yet to show concrete evidence that it has the capacity to return to sustainable profitability. The rating agency believes that the standalone credit profile of Attica Bank is weaker than its local peers, as reflected by the lower BCA. Moody's said that the higher sovereign rating now allows certain rating differentiation among Greek banks, while prior to this rating action all Greek banks were rated at the same level towards the end of the rating scale. For more details on Attica Bank, please see individual bank section below.

DEPOSIT RATINGS AFFIRMED AT Caa3; OUTLOOK CHANGED TO POSITIVE FROM STABLE FOR TWO BANKS

The affirmation of the banks' Caa3 deposit ratings primarily reflects banks' relatively small pool of unsecured obligations and minimal subordinated liabilities available to absorb potential losses in case of a bank resolution scenario. Accordingly, depositors remain vulnerable to bail-in risks within the context of the Bank Recovery and Resolution Directive (BRRD) transposition law that was passed in Greece in 2015. Although Greek depositors were excluded from bail-in in the last few years, Moody's considers that the relative risks are still high and thus positions long-term deposits, senior unsecured debt and subordinated debt at the same rating level of Caa3 based on the rating agency's LGF analysis of banks' liability structure.

The long-term deposit ratings of Caa3 also take into consideration the on-going capital controls in place as well as the implied losses faced by depositors that do not have instant access to the full amount of their funds. All banks' Caa3 deposit ratings are positioned one notch lower than the recently revised local-currency deposit ceiling for Greece of Caa2.

The change in the deposit rating outlook to positive from stable for Alpha Bank and National Bank of Greece reflects the rating agency's opinion of these banks' marginally stronger standalone credit profiles than their peers, and its expectation that going forward their liability structure through more deposits could induce a higher deposit rating. Alpha Bank has a stronger tangible capital position than its peers, while National Bank of Greece has a better funding profile with lower ELA dependence than the other banks. The individual bank sections below provide more details in this respect.

SENIOR AND SUBORDINATED RATINGS UPGRADED TO (P)Caa3 from (P)Ca AND C RESPECTIVELY, JUNIOR INSTRUMENTS AFFIRMED AT C(hyb)

The upgrade of the four banks' senior debt ratings to (P)Caa3 from (P)Ca and subordinated debt ratings to (P)Caa3 from (P)C reflect Moody's loss given failure (LGF) analysis of their liability structure, which indicates that such obligations should be placed at the same level as deposits. This is driven by the relatively thin cushion that banks have on their balance sheets to absorb losses in a potential bank resolution scenario. The rating agency notes that a large proportion of Greek banks' liabilities are in the form secured obligations, either through the ELA mechanism, or the ECB or the inter-bank repo market, limiting the pool of creditors available to absorb losses.

Prior to this rating action, Moody's positioned the ratings of these debt instruments based on an expected loss basis, as part of banks' liability management exercises and voluntary exchange offers towards investors in late 2015, when banks were carrying out their third round of recapitalization over the last few years. The senior debt ratings outlook is positive for Alpha Bank and National Bank of Greece, and stable for Piraeus Bank and Eurobank.

At the same time, Moody's affirmed the C(hyb) ratings assigned to the two systemic banks' non-cumulative Tier 1 preferred stock. These affirmations were driven by these instruments' structural subordination to senior and subordinated debt, and the higher likelihood that they could sustain significant losses before any senior and subordinated debt holders are affected in a potential bank resolution scenario.

INDIVIDUAL BANKS

--- ALPHA BANK

Alpha Bank's BCA upgrade to caa2 from caa3 and its positive rating outlook take into account its relatively high pro-forma common equity Tier 1 (CET1) ratio of 17.3% in March 2017, following the recent sale of its operations in Serbia. Moody's notes that Alpha Bank has the lowest level of eligible deferred tax assets (DTAs) on its balance sheet at around €3.4 billion in March 2017, which comprised around 39% of its nominal CET1 capital. This level positions the bank at the stronger end in terms of loss-absorbing tangible capital available among its local systemic peers, underpinning Alpha Bank's positive rating outlook. Moody's considers such DTAs as a weak form of capital, in view of Greece's low rating.

The bank's ratings also consider its return to positive profitability with a net profit of around €48 million for the first three-months of 2017, while its nonperforming loans (NPL) and nonperforming exposures (NPE) ratio stood at around 38% and 54% respectively as of March 2017. NPL and NPE provisioning coverage was around 69% and 49%, respectively. Moody's believes that the relatively high NPL provisioning coverage provides the bank with more flexibility to actively manage its NPL portfolio. The bank's ELA as of March 2017 stood at €12.2 billion (down from €19.6 billion in December 2015), comprising 19% of its total assets, although Moody's expects this type of funding to reduce further in 2017-18.

--- ATTICA BANK

The affirmation of Attica Bank's BCA at caa3 takes into consideration its CET1 ratio of 14.8% in December 2016, but also the fact that this is still short of around €68 million that the bank needs to raise in order to be fully compliant with the Bank of Greece's adverse scenario capital estimate. Moody's understands that the bank has agreed with a potential investor aiming to cover this capital shortfall through a deal that will also involve the management of a pool of NPEs.

The bank, which is the smallest among all rated Greek banks with a market share of only around 2%, reported losses of around €50 million in 2016, as its NPE ratio increased to 61% in December 2016, from 56% in December 2015, which is the highest among local peers. The bank's ELA dependence was around €1 billion as of December 2016, comprising around 28% of its total assets. The rating agency expects that on-going restructuring at the bank by the new top management is likely to start yielding results in 2017-18, although Attica Bank's performance is likely to still lag behind its peers.

--- EUROBANK ERGASIAS

Eurobank's BCA of caa2 takes into account its reported CET1 ratio of 17.3% in March 2017, up from 16.5% in March 2016. Nonetheless, Moody's considers the bank to have a lower quality of capital than its peers, in view of its eligible DTAs (€4 billion) and the state preference shares of around €950 million that the bank retains on its balance sheet and will need to repay at some stage. The rating agency estimates that around 75% of the bank's nominal CET1 capital is in the form of either eligible DTAs or preference shares, leaving minimal loss-absorbing tangible common equity available.

The bank's profit in the first three months of 2017 amounted to around €37 million, while its NPL and NPE ratio were at around 35% and 45%, respectively, as of March 2017. Eurobank's NPL and NPE provisioning coverage was around 66% and 51%, respectively. The bank's ELA as of March 2017 stood at €12.2 billion, comprising around 19% of its total assets, although Moody's notes that the bank was able to reduce this ELA dependence significantly from €22.9 billion in June 2015.

--- NATIONAL BANK OF GREECE

The bank's BCA upgrade to caa2 from caa3 and its positive rating outlook takes into consideration its strong savings franchise in Greece, and its ELA balance that was the lowest among its peers at €5.6 billion, comprising 7.4% of its total assets as of March 2017. Moody's expects NBG to be the first bank in Greece to fully repay its ELA in the next 12-18 months, mainly through the sale of its foreign subsidiaries and its insurance arm and through more customer deposits.

National Bank of Greece (NBG) had a pro-forma CET1 ratio, incorporating the recent sale of its Bulgarian operations, of 17% in March 2017 from 16.3% in December 2016. However, this healthy regulatory ratio is undermined by the bank's high eligible DTAs (€4.8 billion), which comprised around 73% of its nominal CET1 capital as of March 2017. NBG is likely to further enhance its CET1 capital through the sale of more non-core assets going forward.

The bank's NPL and NPE ratios in Greece stood at 33% and 44%, respectively, as of March 2017, while the NPL and NPE provisioning coverage was 75% and 57%, the highest within its local peer group. The rating agency believes that recoveries from the NPL portfolio could further enhance the bank's core pre-provision income, which increased by 30% year-on-year in the first three-months of 2017, combined with further reduction in its operating expenses.

--- PIRAEUS BANK

Piraeus Bank's BCA of caa2 considers its increased CET1 ratio to 16.8% in March 2017 from 11.2% in September 2015, including the €2 billion CoCos that the bank still retains but will have to repay back to the state-owned Hellenic Financial Stability Fund (HFSF) at some stage. The bank's eligible DTAs (€4.1 billion) comprised around 60% of its nominal CET1 capital, excluding its CoCos, undermining the quality of its capital position.

Moody's considers Piraeus Bank's asset quality position to be among the weakest in the system due to its numerous take-overs of smaller problematic banks in the last few years, which resulted in an NPL and NPE ratio of around 38% and 55%, respectively, as of March 2017. In addition, the bank's NPL and NPE provisioning coverage was at 68% and 46%, respectively. However, the rating agency expects the bank's asset quality to gradually improve in view of its focus and active management of its NPLs, and the additional tools provided to the banks for managing their NPLs through recent legislative measures. The bank reported a net loss of around €6 million during the first three-months of 2017, although Moody's positively views the bank's ability to increase its pre-provision income by 11% year-on-year.

WHAT COULD MOVE THE RATINGS UP/DOWN

Over time, upward deposit and senior debt rating pressure could arise following a stabilisation of the country's macro-economic environment, combined with an improvement in banks' asset quality, profitability and funding. The return of more deposits back to the banking system would also increase the pool of unsecured obligations available to banks, which could trigger a deposit and senior debt rating upgrade driven by the rating agency's LGF approach.

Greek banks' deposit and senior debt ratings could be downgraded in the event of political turmoil in the country for an extended period of time that substantially affects domestic consumption and economic activity, which have gradually been recovering from a very low base.

The principal methodology used in these ratings was Banks published in January 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

THE SPECIFIC RATING ACTIONS IMPLEMENTED TODAY ARE AS FOLLOWS:

Upgrades:

..Issuer: Alpha Bank AE

.... Senior Unsecured MTN, Upgraded to (P)Caa3 from (P)Ca

.... BACKED (Government) Senior Unsecured MTN, Upgraded to (P)Caa2 from (P)Caa3

.... Subordinate MTN, Upgraded to (P)Caa3 from (P)C

.... Adjusted Baseline Credit Assessment, Upgraded to caa2 from caa3

.... Baseline Credit Assessment, Upgraded to caa2 from caa3

.... Counterparty Risk Assessment, Upgraded to Caa2(cr) from Caa3(cr)

..Issuer: Alpha Credit Group plc

.... BACKED Senior Unsecured Regular Bond/Debenture, Upgraded to Caa3 Positive from Ca Stable (Assumed by Alpha Bank AE)

.... BACKED Subordinate Regular Bond/Debenture, Upgraded to Caa3 from C (Assumed by Alpha Bank AE)

.... BACKED Subordinate MTN, Upgraded to (P)Caa3 from (P)C

.... BACKED Senior Unsecured MTN, Upgraded to (P)Caa3 from (P)Ca

..Issuer: Alpha Group Jersey Limited

.... BACKED Senior Unsecured MTN, Upgraded to (P)Caa3 from (P)Ca

.... BACKED Subordinate MTN, Upgraded to (P)Caa3 from (P)C

..Issuer: Emporiki Group Finance Plc

.... BACKED Senior Unsecured Regular Bond/Debenture, Upgraded to Caa3 Positive from Ca Stable (Assumed by Alpha Bank AE)

..Issuer: Attica Bank S.A.

.... Counterparty Risk Assessment, Upgraded to Caa2(cr) from Caa3(cr)

..Issuer: Eurobank Ergasias S.A.

.... Senior Unsecured MTN, Upgraded to (P)Caa3 from (P)Ca

.... BACKED (Government) Senior Unsecured MTN, Upgraded to (P)Caa2 from (P)Caa3

.... Subordinate MTN, Upgraded to (P)Caa3 from (P)C

.... Adjusted Baseline Credit Assessment, Upgraded to caa2 from caa3

.... Baseline Credit Assessment, Upgraded to caa2 from caa3

.... Counterparty Risk Assessment, Upgraded to Caa2(cr) from Caa3(cr)

..Issuer: ERB Hellas (Cayman Islands) Limited

.... BACKED Senior Unsecured MTN, Upgraded to (P)Caa3 from (P)Ca

.... BACKED Subordinate MTN, Upgraded to (P)Caa3 from (P)C

..Issuer: ERB Hellas PLC

.... BACKED Senior Unsecured Regular Bond/Debenture, Upgraded to Caa3 Stable from Ca Stable

.... BACKED Subordinate Regular Bond/Debenture, Upgraded to Caa3 from C

.... BACKED Senior Unsecured MTN, Upgraded to (P)Caa3 from (P)Ca

.... BACKED Subordinate MTN, Upgraded to (P)Caa3 from (P)C

..Issuer: National Bank of Greece S.A.

.... BACKED (Government) Senior Unsecured MTN, Upgraded to (P)Caa2 from (P)Caa3

.... Adjusted Baseline Credit Assessment, Upgraded to caa2 from caa3

.... Baseline Credit Assessment, Upgraded to caa2 from caa3

.... Counterparty Risk Assessment, Upgraded to Caa2(cr) from Caa3(cr)

..Issuer: NBG Finance plc

.... BACKED Senior Unsecured MTN, Upgraded to (P)Caa3 from (P)Ca

.... BACKED Subordinate MTN, Upgraded to (P)Caa3 from (P)C

..Issuer: Piraeus Bank S.A.

.... Senior Unsecured MTN, Upgraded to (P)Caa3 from (P)Ca

.... Subordinate MTN, Upgraded to (P)Caa3 from (P)C

.... Adjusted Baseline Credit Assessment, Upgraded to caa2 from caa3

.... Baseline Credit Assessment, Upgraded to caa2 from caa3

.... Counterparty Risk Assessment, Upgraded to Caa2(cr) from Caa3(cr)

..Issuer: Piraeus Group Finance Plc

.... BACKED Senior Unsecured MTN, Upgraded to (P)Caa3 from (P)Ca

.... BACKED Subordinate MTN, Upgraded to (P)Caa3 from (P)C

Affirmations:

..Issuer: Alpha Bank AE

.... LT Bank Deposits, Affirmed Caa3 Positive From Stable

.... ST Bank Deposits, Affirmed NP

....Other Short Term, Affirmed (P)NP

.... Counterparty Risk Assessment, Affirmed NP(cr)

..Issuer: Alpha Credit Group plc

.... BACKED Other Short Term, Affirmed (P)NP

.... BACKED Commercial Paper, Affirmed NP

..Issuer: Alpha Group Jersey Limited

.... BACKED Pref. Stock Non-cumulative, Affirmed C (hyb)

..Issuer: Attica Bank S.A.

.... LT Bank Deposits, Affirmed Caa3 Stable

.... ST Bank Deposits, Affirmed NP

.... Adjusted Baseline Credit Assessment, Affirmed caa3

.... Baseline Credit Assessment, Affirmed caa3

.... Counterparty Risk Assessment, Affirmed NP(cr)

..Issuer: Eurobank Ergasias S.A.

.... LT Bank Deposits, Affirmed Caa3 Stable

.... ST Bank Deposits, Affirmed NP

.... Other Short Term, Affirmed (P)NP

.... BACKED Other Short Term, Affirmed (P)NP

.... Counterparty Risk Assessment, Affirmed NP(cr)

..Issuer: ERB Hellas (Cayman Islands) Limited

.... BACKED Other Short Term, Affirmed (P)NP

..Issuer: ERB Hellas Funding Limited

.... BACKED Pref. Stock Non-cumulative, Affirmed C (hyb)

..Issuer: ERB Hellas PLC

.... BACKED Commercial Paper, Affirmed NP

.... BACKED Other Short Term, Affirmed (P)NP

..Issuer: National Bank of Greece S.A.

.... LT Bank Deposits, Affirmed Caa3 Positive From Stable

.... ST Bank Deposits, Affirmed NP

.... BACKED Other Short Term, Affirmed (P)NP

.... Counterparty Risk Assessment, Affirmed NP(cr)

..Issuer: Piraeus Bank S.A.

.... LT Bank Deposits, Affirmed Caa3 Stable

.... ST Bank Deposits, Affirmed NP

.... Counterparty Risk Assessment, Affirmed NP(cr)

..Issuer: Piraeus Group Finance Plc

.... BACKED Other Short Term, Affirmed (P)NP

.... BACKED Commercial Paper, Affirmed NP

Outlook Actions:

..Issuer: Alpha Bank AE

....Outlook, Changed To Positive From Stable

..Issuer: Attica Bank S.A.

....Outlook, Remains Stable

..Issuer: Eurobank Ergasias S.A.

....Outlook, Remains Stable

..Issuer: National Bank of Greece S.A.

....Outlook, Changed To Positive From Stable

..Issuer: Piraeus Bank S.A.

....Outlook, Remains Stable

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt 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.

Nondas Nicolaides
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service Cyprus Ltd.
Porto Bello Building
1, Siafi Street, 3042 Limassol
PO Box 53205
Limassol CY 3301
Cyprus
JOURNALISTS: 852 3758 1350
Client Service: 44 20 7772 5454

Sean Marion
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Cyprus Ltd.
Porto Bello Building
1, Siafi Street, 3042 Limassol
PO Box 53205
Limassol CY 3301
Cyprus
JOURNALISTS: 852 3758 1350
Client Service: 44 20 7772 5454

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.

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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.

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