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Rating Action:

Moody's affirms all ratings of BNY Mellon, Northern Trust and State Street; outlooks remain stable

12 Nov 2020

New York, November 12, 2020 -- Moody's Investors Service ("Moody's") has affirmed all of the ratings and assessments of The Bank of New York Mellon Corporation (BNY Mellon), Northern Trust Corporation (Northern Trust) and State Street Corporation (State Street), and the ratings of their respective subsidiaries. The rating outlooks for all three firms are stable.

BNY Mellon is rated A1 for long-term senior unsecured debt. The Bank of New York Mellon, its lead operating bank, has deposit ratings of Aa1/Prime-1, Counterparty Risk Ratings (CRR) of Aa2/Prime-1, a standalone Baseline Credit Assessment (BCA) of a1, and Counterparty Risk (CR) Assessments of Aa1(cr)/Prime-1(cr).

Northern Trust is rated A2 for long-term senior unsecured debt. Northern Trust Company, its lead operating bank, has deposit ratings of Aa2/Prime-1, CRRs of A1/Prime-1, a standalone BCA of a1, and CR Assessments of Aa3(cr)/Prime-1(cr).

State Street is rated A1 for long-term senior unsecured debt. State Street Bank and Trust Company, its lead operating bank, has deposit ratings of Aa1/Prime-1, CRRs of Aa2/Prime-1, a standalone BCA of a1, and CR Assessments of Aa1(cr)/Prime-1(cr).

A full list of affected ratings can be found at the end of this press release.

"The ratings affirmation reflects the firms' resilient performance in a particularly uncertain operating environment and the sustainability of their franchises", said Allen Tischler, Senior Vice President. "Although depressed interest rates and adverse secular trends are undermining the banks' current profitability potential, they have strong balance sheets and enviable franchises in global institutional investment and asset servicing. These healthy investment servicing businesses are complemented by large asset and/or wealth management businesses that enhance the banks' earnings diversity. Finally, each of the banks has a strong liquidity profile and limited asset risk."

The uncertain operating environment stems from the coronavirus pandemic outbreak, which Moody's regards as a social risk under its environmental, social and governance (ESG) framework, given the substantial implications for public health and safety.

RATINGS RATIONALE

The affirmation of the ratings and assessments for all three US trust and custody banks considers the banks' fundamental credit strengths, which include contained credit risk and robust capital and liquidity. Although credit risk is limited, the large processing volumes fundamental to the banks' global operations give rise to notable operating risk, which Moody's has incorporated in the assigned ratings. At a1, the banks' respective BCAs are notably superior to the current a3 median for rated US banks, which reflects not only their credit fundamentals, but also their defensible global franchises.

Nonetheless, Moody's notes that all three banks face profitability challenges. Indeed, profitability is the weakest credit metric in the banks' respective financial profiles, as assessed under Moody's bank rating methodology. In particular, historically low global interest rates in 2020 have compressed the banks' net interest income, driven money market fee waivers and weakened the revenue potential of their securities finance businesses.

The revenue constraints associated with lower-for-longer interest rates compound the long-present secular pressures affecting the banks' ability to organically grow their fee income. Specifically, despite the banks' strong global franchises, they lack meaningful pricing power, particularly for core custody, fund accounting and related services. This is a function of their largest clients' desire to reduce their own expenses amidst the shift away from higher-fee active management toward less-lucrative passive management, and towards more packaged investment products.

In response, the trust and custody banks have focused on enhancing their product set to deliver revenue growth, partly through acquisition and/or third-party partnerships. However, given the challenging operating environment and the time needed for some of these initiatives to gain traction, Moody's does not anticipate robust organic revenue growth for the banks in 2021. The banks have also responded to their profitability pressures with various efficiency initiatives, but their cost/income ratios remain elevated as they continue to make necessary investments in technology and automation to remain competitive, notwithstanding good expense discipline overall.

The banks' large global asset and investment servicing businesses expose them to heightened operational risk. In fact, Moody's considers operational risk to be more prominent than credit risk for these banks given both the composition and comparatively modest size of their loan books. With respect to operational risk, all three banks have experienced material operational miscues in recent years, but none significant enough to reflect negatively on Moody's assessment of their overall asset risk.

The banks' asset and wealth management franchises provide diversification. However, Moody's noted that both asset and wealth management are much more fragmented markets than investment and asset servicing, and are exposed to significant nonbank competition.

Moody's added that robust liquidity is a key credit strength of all three banks. The liquidity stems from their investment servicing businesses, which generate sizable low-cost deposit balances. Indeed, given the prevailing negative interest rates in Europe and near-zero rates elsewhere, all three of the banks reported deposit costs below zero for the third quarter of 2020. All three banks also have sizable holdings of liquid assets, protecting them from market shocks.

With respect to capital, the trust and custody banks' position is solid. The banks performed well in regulatory stress tests and their capital has strengthened in 2020, in part due to the cessation of share buybacks at the behest of their regulators. As measured by their common equity Tier 1 ratios at 30 September 2020, Northern Trust's was 13.4%, BNY Mellon's was 13.0% and State Street's was 12.4%, calculated as the lower of either the advanced or standardized approach.

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

For all three banks, the stable outlook indicates that a BCA and rating upgrade is not likely over the next 12-18 months. Moreover, given the banks' strong relative positioning on Moody's rating scale, the pathways toward positive rating pressure are limited. However, in a scenario where any of the banks can demonstrate a material and enduring improvement in core profitability, while also maintaining robust capital and liquidity, positive rating pressure could emerge.

The BCA and ratings at any of the banks could be downgraded if their profitability weakens below current levels and appears unlikely to rebound or if outsized operational risk shortcomings emerge that undermine the banks' franchises. On the other hand, a modest reduction in any of the banks' capitalization in a more predictable operating environment would not result in negative rating pressure, though materially lower capitalization could have negative rating implications.

Affirmations:

..Issuer: Northern Trust Corporation

....LT Issuer Rating, Affirmed A2, Stable

....Pref. Stock Non-cumulative, Affirmed Baa1 (hyb)

....Subordinate Regular Bond/Debenture, Affirmed A2

....Senior Unsecured Regular Bond/Debenture, Affirmed A2, Stable

..Issuer: Northern Trust Company

....Adjusted Baseline Credit Assessment, Affirmed a1

....Baseline Credit Assessment, Affirmed a1

....LT Counterparty Risk Assessment, Affirmed Aa3(cr)

....ST Counterparty Risk Assessment, Affirmed P-1(cr)

....LT Counterparty Risk Rating (Local Currency), Affirmed A1

....ST Counterparty Risk Rating (Local Currency), Affirmed P-1

....LT Counterparty Risk Rating (Foreign Currency), Affirmed A1

....ST Counterparty Risk Rating (Foreign Currency), Affirmed P-1

....LT Issuer Rating, Affirmed A2, Stable

....LT Bank Deposits, Affirmed Aa2, Stable

....ST Bank Deposits, Affirmed P-1

....Senior Unsecured Bank Note Program, Affirmed (P)A2

....Subordinate Bank Note Program, Affirmed (P)A2

....ST Bank Note Program, Affirmed (P)P-1

..Issuer: NTC Capital I

....Backed Pref. Stock, Affirmed A3 (hyb)

..Issuer: NTC Capital II

....Backed Pref. Stock, Affirmed A3 (hyb)

..Issuer: Bank of New York Mellon Corporation (The)

....LT Issuer Rating, Affirmed A1, Stable

....Commercial Paper, Affirmed P-1

....Senior Unsecured Regular Bond/Debenture, Affirmed A1, Stable

....Pref. Stock Non-cumulative, Affirmed Baa1 (hyb)

....Senior Subordinate Regular Bond/Debenture, Affirmed A2

....Senior Unsecured Shelf, Affirmed (P)A1

....Senior Subordinate Shelf, Affirmed (P)A2

....Pref. Shelf, Affirmed (P)A3

....Pref. Shelf Non-cumulative, Affirmed (P)Baa1

....Senior Subordinate Medium-Term Note Program, Affirmed (P)A2

....Senior Unsecured Medium-Term Note Program, Affirmed (P)A1

..Issuer: BNY Mellon National Association

....Adjusted Baseline Credit Assessment, Affirmed a1

....Baseline Credit Assessment, Affirmed a1

....LT Counterparty Risk Assessment, Affirmed Aa1(cr)

....ST Counterparty Risk Assessment, Affirmed P-1(cr)

....LT Counterparty Risk Rating (Local Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Local Currency), Affirmed P-1

....LT Counterparty Risk Rating (Foreign Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Foreign Currency), Affirmed P-1

....LT Issuer Rating, Affirmed Aa2, Stable

....LT Bank Deposits, Affirmed Aa1, Stable

....ST Bank Deposits, Affirmed P-1

..Issuer: BNY Mellon Trust of Delaware

....Adjusted Baseline Credit Assessment, Affirmed a1

....Baseline Credit Assessment, Affirmed a1

....LT Counterparty Risk Assessment, Affirmed Aa1(cr)

....ST Counterparty Risk Assessment, Affirmed P-1(cr)

....LT Counterparty Risk Rating (Local Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Local Currency), Affirmed P-1

....LT Counterparty Risk Rating (Foreign Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Foreign Currency), Affirmed P-1

....LT Issuer Rating, Affirmed Aa2, Stable

....LT Bank Deposits, Affirmed Aa1, Stable

....ST Bank Deposits, Affirmed P-1

..Issuer: Bank of New York Mellon (The)

....Adjusted Baseline Credit Assessment, Affirmed a1

....Baseline Credit Assessment, Affirmed a1

....LT Counterparty Risk Assessment, Affirmed Aa1(cr)

....ST Counterparty Risk Assessment, Affirmed P-1(cr)

....LT Counterparty Risk Rating (Local Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Local Currency), Affirmed P-1

....LT Counterparty Risk Rating (Foreign Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Foreign Currency), Affirmed P-1

....LT Issuer Rating, Affirmed Aa2, Stable

....LT Bank Deposits, Affirmed Aa1, Stable

....ST Bank Deposits, Affirmed P-1

....Senior Unsecured Medium-Term Note Program, Affirmed (P)Aa2

....Senior Unsecured Bank Note Program, Affirmed (P)Aa2

....ST Bank Note Program, Affirmed (P)P-1

....Commercial Paper, Affirmed P-1

....Senior Unsecured Regular Bond/Debenture, Affirmed Aa2, Stable

..Issuer: Bank of New York Mellon SA/NV (The)

....Adjusted Baseline Credit Assessment, Affirmed a1

....Baseline Credit Assessment, Affirmed a1

....LT Counterparty Risk Assessment, Affirmed Aa1(cr)

....ST Counterparty Risk Assessment, Affirmed P-1(cr)

....LT Counterparty Risk Rating (Local Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Local Currency), Affirmed P-1

....LT Counterparty Risk Rating (Foreign Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Foreign Currency), Affirmed P-1

....LT Issuer Rating (Local Currency), Affirmed Aa2, Stable

....ST Issuer Rating (Local Currency), Affirmed P-1

....LT Issuer Rating (Foreign Currency), Affirmed Aa2, Stable

....ST Issuer Rating (Foreign Currency), Affirmed P-1

....LT Bank Deposits (Local Currency), Affirmed Aa1, Stable

....ST Bank Deposits (Local Currency), Affirmed P-1

....LT Bank Deposits (Foreign Currency), Affirmed Aa1, Stable

....ST Bank Deposits (Foreign Currency), Affirmed P-1

..Issuer: BANK OF NEW YORK MELLON SA/NV (Lux. Branch)

....LT Counterparty Risk Assessment, Affirmed Aa1(cr)

....ST Counterparty Risk Assessment, Affirmed P-1(cr)

....LT Counterparty Risk Rating (Local Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Local Currency), Affirmed P-1

....LT Counterparty Risk Rating (Foreign Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Foreign Currency), Affirmed P-1

....LT Issuer Rating (Local Currency), Affirmed Aa2, Stable Outlook Assigned

....ST Issuer Rating (Local Currency), Affirmed P-1

....LT Issuer Rating (Foreign Currency), Affirmed Aa2, Stable Outlook Assigned

....ST Issuer Rating (Foreign Currency), Affirmed P-1

....LT Bank Deposits (Local Currency), Affirmed Aa1, Stable Outlook Assigned

....ST Bank Deposits (Local Currency), Affirmed P-1

....LT Bank Deposits (Foreign Currency), Affirmed Aa1, Stable Outlook Assigned

....ST Bank Deposits (Foreign Currency), Affirmed P-1

..Issuer: BANK OF NEW YORK MELLON SA/NV (Milan Branch)

....LT Counterparty Risk Assessment, Affirmed Aa2(cr)

....ST Counterparty Risk Assessment, Affirmed P-1(cr)

....LT Counterparty Risk Rating (Local Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Local Currency), Affirmed P-1

....LT Counterparty Risk Rating (Foreign Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Foreign Currency), Affirmed P-1

....LT Issuer Rating (Local Currency), Affirmed Aa2, Stable

....ST Issuer Rating (Local Currency), Affirmed P-1

....LT Issuer Rating (Foreign Currency), Affirmed Aa2, Stable

....ST Issuer Rating (Foreign Currency), Affirmed P-1

....LT Bank Deposits (Local Currency), Affirmed Aa2, Stable

....ST Bank Deposits (Local Currency), Affirmed P-1

....LT Bank Deposits (Foreign Currency), Affirmed Aa2, Stable

....ST Bank Deposits (Foreign Currency), Affirmed P-1

..Issuer: Bank of New York Mellon Trust Company, N.A.

....Adjusted Baseline Credit Assessment, Affirmed a1

....Baseline Credit Assessment, Affirmed a1

....LT Counterparty Risk Assessment, Affirmed Aa1(cr)

....ST Counterparty Risk Assessment, Affirmed P-1(cr)

....LT Counterparty Risk Rating (Local Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Local Currency), Affirmed P-1

....LT Counterparty Risk Rating (Foreign Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Foreign Currency), Affirmed P-1

....LT Issuer Rating, Affirmed Aa2, Stable

..Issuer: Mellon Capital IV

....Backed Pref. Stock, Affirmed Baa1 (hyb)

..Issuer: Mellon Funding Corporation

....Backed Commercial Paper, Affirmed P-1

..Issuer: State Street Corporation

....Junior Subordinated Regular Bond/Debenture, Affirmed A3 (hyb)

....Pref. Stock Non-cumulative, Affirmed Baa1 (hyb)

....Subordinate Regular Bond/Debenture, Affirmed A2

....Senior Unsecured Regular Bond/Debenture, Affirmed A1, Stable

..Issuer: State Street Bank and Trust Company

....Adjusted Baseline Credit Assessment, Affirmed a1

....Baseline Credit Assessment, Affirmed a1

....LT Counterparty Risk Assessment, Affirmed Aa1(cr)

....ST Counterparty Risk Assessment, Affirmed P-1(cr)

....LT Counterparty Risk Rating (Local Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Local Currency), Affirmed P-1

....LT Counterparty Risk Rating (Foreign Currency), Affirmed Aa2

....ST Counterparty Risk Rating (Foreign Currency), Affirmed P-1

....LT Issuer Rating, Affirmed Aa3, Stable

....LT Bank Deposits, Affirmed Aa1, Stable

....ST Bank Deposits, Affirmed P-1

Outlook Actions:

..Issuer: Northern Trust Corporation

....Outlook, Remains Stable

..Issuer: Northern Trust Company

....Outlook, Remains Stable

..Issuer: Bank of New York Mellon Corporation (The)

....Outlook, Remains Stable

..Issuer: BNY Mellon National Association

....Outlook, Remains Stable

..Issuer: BNY Mellon Trust of Delaware

....Outlook, Remains Stable

..Issuer: Bank of New York Mellon (The)

....Outlook, Remains Stable

..Issuer: Bank of New York Mellon SA/NV (The)

....Outlook, Remains Stable

..Issuer: BANK OF NEW YORK MELLON SA/NV (Lux. Branch)

....Outlook, Remains Stable

..Issuer: BANK OF NEW YORK MELLON SA/NV (Milan Branch)

....Outlook, Remains Stable

..Issuer: Bank of New York Mellon Trust Company, N.A.

....Outlook, Remains Stable

..Issuer: State Street Corporation

....Outlook, Remains Stable

..Issuer: State Street Bank and Trust Company

....Outlook, Remains Stable

The principal methodology used in these ratings was Banks Methodology published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1147865. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

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.

Allen Tischler
Senior Vice President
Financial Institutions 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

M. Celina Vansetti-Hutchins
MD - Banking
Financial Institutions 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.
© 2021 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.

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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 JPY550,000,000.

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

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