Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

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

Terms of One-Time Website Use

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

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

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

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

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

I AGREE
Rating Action:

Moody's affirms Iraq's Caa1 ratings, maintains stable outlook

30 Jul 2019

New York, July 30, 2019 -- Moody's Investors Service ("Moody's") has today affirmed the Government of Iraq's long-term issuer and senior unsecured ratings at Caa1 and maintained the stable outlook.

The decision to affirm Iraq's Caa1 ratings reflects credit challenges posed by very weak institutions and governance that in Moody's view, will continue to limit policy effectiveness, constrain the government's capacity to respond to external and domestic shocks and weigh on the -- currently very weak - competitiveness of Iraq's economy. The Caa1 rating level also captures Iraq's inherently very high level of political risk, in part related to political strife which will slow reform progress, hamper a strengthening of institutions and contribute to maintaining very high fiscal, external and economic vulnerability to potential declines in oil prices.

The stable outlook balances a number of potential positive and negative drivers. Recent improvements in security are set against the country's overall fragility given its deep political, ethnic and sectarian fragmentation and rising social pressures. Similarly, recent pledges of reconstruction assistance from the international community could have significant credit positive effects; but the formidable size of the task, which is exacerbated by very weak institutions and the absence of a coherent medium-term reform agenda, materially reduces the likely credit impact. And while the stable outlook reflects potential economic and fiscal upside from the government's plans to increase oil production in the medium term, it also takes into account the near-term constraints from Iraq's commitment to comply with the oil output cuts agreed by the Organization of Petroleum Exporting Countries (OPEC) and generally weak investment absorption capacity.

Iraq's country ceilings remain unchanged. The foreign currency bond ceiling is at B3, the foreign currency deposit ceiling at Caa2, and the long-term local currency bond and deposit ceilings at B3.

RATINGS RATIONALE

RATIONALE FOR AFFIRMING THE Caa1 RATINGS

WEAK INSTITUTIONS AND GOVERNANCE ARE THE KEY CREDIT CONSTRAINT

In Moody's view, Iraq's rating will remain constrained by weak institutions and governance that will limit the government's capacity to implement reforms and respond effectively to external and domestic shocks. This constraint has not been alleviated materially over the past two years.

Iraq has made little progress on structural and legislative reforms that would meaningfully strengthen its institutional framework, improve policy effectiveness and enhance the government's policy implementation capacity, all of which remain hampered by governance challenges and pervasive corruption.

In particular, although Iraq has developed an anti-corruption and anti-money laundering framework, and earlier this year established a new High Council for Combatting Corruption, coordination between the relevant government agencies and institutions remains weak, which impedes effective implementation, supervision, and enforcement. According to the most recent Worldwide Governance Indicators, Iraq continues to rank among the weakest 10% of sovereigns rated by Moody's with regards to rule of law, control of corruption, and government effectiveness.

Moreover, most structural and fiscal reform measures committed under the three-year IMF program, which expired in July 2019, were either not enacted or reversed during the past two years. This includes a reversal of spending cuts implemented in 2016-17, no significant new non-oil revenue streams being introduced, and no significant progress towards a stronger supervision and a comprehensive restructuring of the banking system. Reforms of the public financial management framework remain in initial stages.

Moody's believes that Iraq's banking system, dominated by very weak state-owned banks, poses risks to Iraq's financial stability and financial intermediation, and is a source of government liquidity risks, given the sovereign's reliance on the domestic banks for the rollover of its domestic debt, which stood at 18% of GDP in 2018, nearly all of which is short term. Impending recapitalization of state-owned banks also presents a significant contingent liability risk for the sovereign.

In Moody's view, a new general financial management law, which was approved in May this year, offers a prospect for more effective fiscal policy. The new legislation mandates greater fiscal transparency, constrains parliament's capacity to amend the budget and limits scope for extrabudgetary spending. However, in the absence of additional measures, including a comprehensive overhaul of the public sector wage bill, current spending -- which is expected to rise around 20% in 2019 and accounts for nearly half of total government spending -- will remain the key source of fiscal pressure, especially if oil prices decline.

Weak institutions and implementation capacity challenges have delayed post-war reconstruction efforts and slowed the execution of critical public investment projects, including in the electricity sector. This has contributed to sluggish non-oil growth, which was only 0.8% in 2018, after a 0.6% contraction in 2017. Furthermore, lack of new public investment in power generation and poor maintenance of the electricity transmission grid has led to frequent and lengthy power cuts which, along with rising popular discontent with endemic corruption, poor delivery of public services and insufficient job creation, triggered wide-spread violent protests in the southern, oil-producing region of Basrah during last summer. Such protests are likely to reoccur until the deep issues of inadequate physical and social infrastructure and rife corruption are addressed.

INHERENTLY VERY HIGH LEVEL OF POLITICAL RISK

In Moody's assessment, inherently high level of political risk constitutes another formidable constraint on Iraq's rating, which, in turn, impedes the strengthening of the country's institutions.

Although the security situation in Iraq has improved appreciably since the defeat of ISIS in 2017, as the government regained territorial control over areas previously captured by the self-proclaimed jihadist state, Iraq's domestic political and security risks remain substantial. ISIS continues to operate in the rural areas of central and northwestern Iraq, continues to stage small-scale terrorist attacks across the country, and could re-emerge especially if the government fails to improve the delivery of basic public services, in particular in the Sunni-majority areas. Furthermore, other militias periodically attack US and other foreign targets in Iraq, raising risks for foreign investors, including international oil companies.

Domestic political stability risks have been highlighted by the extended stalemate following the May 2018 elections; it took more than one year to appoint all the members of the cabinet due to deep fragmentation of the political landscape along ethnic and sectarian lines and the rise in prominence of populist political movements in parliament. Delays in government formation have prevented the completion of IMF program reviews since August 2017, while rising pressures to increase social spending have translated in a significantly expansionary budget for 2019, reversing the previous year's fiscal consolidation.

Iraq is also significantly exposed to multiple geopolitical risks. Rising geopolitical tensions in the Gulf threaten disruptions to the maritime transport routes through the Strait of Hormuz, on which Iraq depends for most of its oil exports. The rising tensions could also complicate progress on urgent energy reforms, which require participation of foreign companies, as well as post-war rebuilding efforts. Furthermore, the US (Aaa stable) sanctions on Iran present a direct challenge given Iraq's significant reliance on Iranian imports, including electricity and natural gas for power generation. Finally, the risk of spillovers from the continuing instability in Syria remains.

HIGH VULNERABLITY TO POTENTIAL DECLINES IN OIL PRICES

Moody's expects that Iraq's fiscal and external position will remain highly vulnerable to potential oil price declines.

Although Iraq's fiscal and external balances improved significantly in 2018, this was almost entirely due to higher oil prices without any structural improvement that would reduce the impact of future possible falls in oil prices. Moody's estimates that a $10/barrel decline in oil prices would lead to a 4-5% of GDP deterioration in Iraq's fiscal and external positions. A persistent fall of the same magnitude would increase Iraq's government debt by close to 30% of GDP over five years above Moody's current expectations that assume that oil prices will fluctuate between $50-70/barrel in the medium term. Similarly, such an oil price decline would also erode Iraq's foreign currency reserves and significantly increase government liquidity pressures, given the sovereign's lack of established international capital market access and the absence of meaningful fiscal buffers accumulated during the periods of higher oil prices.

In the absence of new measures, Moody's expects that Iraq's vulnerability to oil price fluctuation will increase in the next several years. This is primarily due to the reversals of the fiscal consolidation efforts during 2018-19 that, according to the IMF, will increase Iraq's fiscal and external breakeven oil prices (the prices that balance the government's budget and current account) above $60/barrel for Brent during 2019-2020.

Iraq's breakevens could decline if the government's plans to increase crude oil production capacity by around 2 million barrels per day (mbpd) to 6.5 mbpd by 2028 translate into higher actual production levels. However, Moody's expects that Iraq's compliance with OPEC production restraint and, over the more medium term, investment implementation delays will reduce the government's ability to make significant progress towards its ambitious production targets.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook balances a number of potential positive and negative drivers.

The stable outlook reflects a balance between the recent improvement in the security situation and the fragility of the country's overall political, economic, and fiscal position.

Financial pledges from the international community to support Iraq's immediate reconstruction needs are balanced against the formidable size of the task at hand and other long-standing socio-economic challenges, exacerbated by very weak institutions and the absence of a coherent medium-term reform agenda.

Potential fiscal and economic upside from the planned increases in oil production capacity will be constrained by the limited scope to actually increase production in an environment of moderate oil prices given Iraq's membership of the Organization of Petroleum Exporting Countries (OPEC) and its obligation to adhere to OPEC production restraint agreements, the latest of which was extended until March 2020.

WHAT COULD CHANGE THE RATING UP

Over the medium term, signs that Iraq's institutions are strengthening, with material improvement in governance, control of corruption and management of public finances would likely lead to an upgrade.

Such improvements would likely point to strengthening the sovereign's fiscal metrics, independent of fluctuations in oil prices, reflecting the implementation of structural measures that reduce and enhance the effectiveness of spending.

An improvement in Iraq's institutions would likely happen in the context of easing political and geopolitical tensions that Moody's expect to last.

WHAT COULD CHANGE THE RATING DOWN

Given the already low rating, a downgrade would likely reflect Moody's view that default risks and the related losses for investors were rising.

This would be most likely to arise in the case of a worsening in the government's fiscal position significantly beyond Moody's current expectations, potentially due to rising social and reconstruction spending pressures. A material increase in domestic political tensions and/or violence that would threaten to disrupt oil production and interfere with the government's ability to collect revenue and service its debt would also increase the likelihood of a downgrade.

GDP per capita (PPP basis, US$): 17,659 (2018 Actual) (also known as Per Capita Income)

Real GDP growth (% change): 0.6% (2018 Actual) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): -0.1% (2018 Actual)

Gen. Gov. Financial Balance/GDP: 6.2% (2018 Actual) (also known as Fiscal Balance)

Current Account Balance/GDP: 5.7% (2018 Actual) (also known as External Balance)

External debt/GDP: 30.5% (2018 Actual)

Level of economic development: Very Low level of economic resilience

Default history: At least one default event (on bonds and/or loans) has been recorded since 1983.

On 25 July 2019, a rating committee was called to discuss the rating of the Iraq, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have not materially changed. The issuer's institutional strength/ framework, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has materially decreased. The issuer's susceptibility to event risks has not materially changed.

The principal methodology used in these ratings was Sovereign Bond Ratings published in November 2018. 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.

The local market analyst for this rating is Alexander Perjessy , +971 (423) 795-48.

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.

David Rogovic
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

Marie Diron
MD - Sovereign Risk
Sovereign Risk Group
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077

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.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

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

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

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

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

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

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

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

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

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

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

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

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

​​​​
Moodys.com