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.
Rating Action:

Moody's affirms ratings of certain Canadian credit card ABS and places other Canadian credit card ABS on review for downgrade following Canadian bank downgrades

Global Credit Research - 11 May 2017

Toronto, May 11, 2017 -- Moody's Investors Service (Moody's) has affirmed the ratings of all classes of asset-backed securities (ABS) issued out of CARDS II Trust (CARDS II), Golden Credit Card Trust (Golden), Hollis Receivables Term Trust II (Hollis), and Trillium Credit Card Trust II (Trillium), and the Class A and Class C notes issued out of Master Credit Card Trust II (MCCT II), and has placed on review for downgrade the Class B notes issued out of MCCT II. This follows Moody's downgrade of the Baseline Credit Assessments, the long-term ratings and the Counterparty Risk Assessments of the sponsoring banks. For the securities on review for downgrade, Moody's will consider potential mitigating actions the sponsor may take during the review period.

Given the revolving structure used in credit card securitizations, the bank sponsor plays an important and ongoing role in underwriting and originating any new accounts for the trust. As a result, Moody's methodology for rating credit card receivables-backed securitizations explicitly incorporates the rating of the sponsoring banks.

The rating actions on the banks sponsoring these securitizations were the result of a change in Moody's assessment of Canada's Macro Profile to "Strong + " from "Very Strong -". The Macro Profile change reflects Moody's expectation of a more challenging operating environment for banks in Canada for the remainder of 2017 and beyond, that could lead to a deterioration in the banks' asset quality, and increase their sensitivity to external shocks. See the related press release for details, "Moody's downgrades Canadian banks," at https://www.moodys.com/research/Moodys-downgrades-Canadian-Banks--PR_366355

A list of the bank rating actions and the issuers follows:

Sponsor: Canadian Imperial Bank of Commerce (CIBC A1/A1 negative, a3, Aa3(cr))

Issuer: Cards II Trust, Series 2015-2

Class A Floating Rate Asset Backed Notes, Affirmed Aaa (sf); previously on Aug 13, 2015 Definitive Rating Assigned Aaa (sf)

Class B Floating Rate Asset Backed Notes, Affirmed Baa1 (sf); previously on Aug 13, 2015 Definitive Rating Assigned Baa1 (sf)

Issuer: Cards II Trust, Series 2016-1

USD Class A Floating Rate Asset Backed Notes, Affirmed Aaa (sf); previously on Jul 27, 2016 Definitive Rating Assigned Aaa (sf)

CAD Class B Floating Rate Asset Backed Notes, Affirmed Baa1 (sf); previously on Jul 27, 2016 Definitive Rating Assigned Baa1 (sf)

Sponsor: Royal Bank of Canada (RBC A1/A1 negative, a3, Aa3(cr))

Issuer: Golden Credit Card Trust, Series 2012-4

Ser. 2012-4 Senior Notes, Affirmed Aaa (sf); previously on Nov 24, 2014 Affirmed Aaa (sf)

Ser. 2012-4 Subordinated Notes, Affirmed A3 (sf); previously on Nov 24, 2014 Upgraded to A3 (sf)

Issuer: Golden Credit Card Trust, Series 2012-6

Ser. 2012-6 Senior Notes, Affirmed Aaa (sf); previously on Nov 24, 2014 Affirmed Aaa (sf)

Ser. 2012-6 Subordinated Notes, Affirmed A3 (sf); previously on Nov 24, 2014 Upgraded to A3 (sf)

Issuer: Golden Credit Card Trust, Series 2014-2

Floating Rate Senior Notes, Affirmed Aaa (sf); previously on Nov 24, 2014 Affirmed Aaa (sf)

Fixed Rate Subordinated Notes, Affirmed A3 (sf); previously on Nov 24, 2014 Upgraded to A3 (sf)

Issuer: Golden Credit Card Trust, Series 2016-1

Credit Card Receivables Backed Class A Floating Rate Notes, Affirmed Aaa (sf); previously on Jan 26, 2016 Definitive Rating Assigned Aaa (sf)

Issuer: Golden Credit Card Trust, Series 2016-3

Class A Floating Rate Notes, Affirmed Aaa (sf); previously on Apr 28, 2016 Definitive Rating Assigned Aaa (sf)

Issuer: Golden Credit Card Trust, Series 2016-4

Class A Floating Rate Notes, Affirmed Aaa (sf); previously on Apr 28, 2016 Definitive Rating Assigned Aaa (sf)

Issuer: Golden Credit Card Trust, Series 2016-5

Class A Fixed Rate Notes, Affirmed Aaa (sf); previously on Sep 20, 2016 Definitive Rating Assigned Aaa (sf)

Issuer: Golden Credit Card Trust, Series 2017-1

Class A Floating Rate Notes, Affirmed Aaa (sf); previously on Feb 21, 2017 Definitive Rating Assigned Aaa (sf)

Sponsor: Bank of Nova Scotia (BNS A1/A1 negative, a3, Aa3(cr))

Issuer: Hollis Receivables Term Trust II, Series 2014-1

Class A Fixed Rate Asset Backed Notes, Affirmed Aaa (sf); previously on Jun 18, 2014 Definitive Rating Assigned Aaa (sf)

Issuer: Hollis Receivables Term Trust II, Series 2015-1

Class A Line of Credit Receivables-Backed Nottes, Affirmed Aaa (sf); previously on Feb 26, 2015 Definitive Rating Assigned Aaa (sf)

Sponsor: Bank of Montreal (BMO A1/A1 negative, a3, Aa3(cr))

Issuer: Master Credit Card Trust II, Series 2013-4

Trust II Ser. 2013-4 Cl. A Notes, Affirmed Aaa (sf); previously on Nov 14, 2013 Definitive Rating Assigned Aaa (sf)

Trust II Ser. 2013-4 Cl. B Notes, Aa3 (sf) Placed Under Review for Possible Downgrade; previously on Apr 30, 2015 Upgraded to Aa3 (sf)

Trust II Ser. 2013-4 Cl. C Notes, Affirmed Baa1 (sf); previously on Sep 17, 2014 Upgraded to Baa1 (sf)

Issuer: Master Credit Card Trust II, Series 2016-1

Trust II Ser. 2016-1 Cl. A Notes, Affirmed Aaa (sf); previously on Apr 19, 2016 Definitive Rating Assigned Aaa (sf)

Trust II Ser. 2016-1 Cl. B Notes, Aa3 (sf) Placed Under Review for Possible Downgrade; previously on Apr 19, 2016 Definitive Rating Assigned Aa3 (sf)

Trust II Ser. 2016-1 Cl. C Notes, Affirmed Baa1 (sf); previously on Apr 19, 2016 Definitive Rating Assigned Baa1 (sf)

Issuer: Master Credit Card Trust II, Series 2016-2

Trust II Ser. 2016-2 Class A Notes, Affirmed Aaa (sf); previously on Apr 29, 2016 Assigned Aaa (sf)

Trust II Ser. 2016-2 Class B Notes, Aa3 (sf) Placed Under Review for Possible Downgrade; previously on Apr 29, 2016 Assigned Aa3 (sf)

Trust II Ser. 2016-2 Class C Notes, Affirmed Baa1 (sf); previously on Apr 29, 2016 Assigned Baa1 (sf)

Issuer: Master Credit Card Trust II, Series 2016-3

Trust II Ser. 2016-3 Class A Notes, Affirmed Aaa (sf); previously on Jul 14, 2016 Definitive Rating Assigned Aaa (sf)

Trust II Ser. 2016-3 Class B Notes, Aa3 (sf) Placed Under Review for Possible Downgrade; previously on Jul 14, 2016 Definitive Rating Assigned Aa3 (sf)

Trust II Ser. 2016-3 Class C Notes, Affirmed Baa1 (sf); previously on Jul 14, 2016 Definitive Rating Assigned Baa1 (sf)

Issuer: Master Credit Card Trust II, Series 2017-1

Trust II Ser. 2017-1 Class A Fixed Rate Notes, Affirmed Aaa (sf); previously on Jan 31, 2017 Definitive Rating Assigned Aaa (sf)

Trust II Ser. 2017-1 Class B Fixed Rate Notes, Aa3 (sf) Placed Under Review for Possible Downgrade; previously on Jan 31, 2017 Definitive Rating Assigned Aa3 (sf)

Trust II Ser. 2017-1 Class C Fixed Rate Notes, Affirmed Baa1 (sf); previously on Jan 31, 2017 Definitive Rating Assigned Baa1 (sf)

Issuer: Master Credit Card Trust II, Series 2017-2

Trust II Ser. 2017-2 Class A Fixed Rate Notes, Affirmed Aaa (sf); previously on Apr 26, 2017 Assigned Aaa (sf)

Trust II Ser. 2017-2 Class B Fixed Rate Notes, Aa3 (sf) Placed Under Review for Possible Downgrade; previously on Apr 26, 2017 Assigned Aa3 (sf)

Trust II Ser. 2017-2 Class C Fixed Rate Notes, Affirmed Baa1 (sf); previously on Apr 26, 2017 Assigned Baa1 (sf)

Sponsor: Bank of Nova Scotia (BNS A1/A1 negative, a3, Aa3(cr))

Issuer: Trillium Credit Card Trust II, Series 2016-1

Series 2016-1 Credit Card Receivables-Backed Class A Floating Rate Notes, Affirmed Aaa (sf); previously on Jun 15, 2016 Definitive Rating Assigned Aaa (sf)

Series 2016-1 Credit Card Receivables-Backed Class B Fixed Rate Notes, Affirmed A3 (sf); previously on Jun 15, 2016 Definitive Rating Assigned A3 (sf)

RATINGS RATIONALE

Moody's rating approach for credit card receivables-backed asset-backed securities (ABS) consists of four main steps: (1) analyzing the transaction's collateral performance and cash flows to determine its Aaa level of credit enhancement given sponsor default (Aaa LGSD), i.e., the maximum stress level of credit enhancement for the transaction, consistent with a Aaa (sf) rating, assuming that the transaction's sponsor has revoked charging privileges on its credit card accounts; (2) determining the level of credit enhancement consistent with a Aaa (sf) rating (Aaa CE) by haircutting the Aaa LGSD based on the sponsor's credit quality, which in our methodology is the same as its Counterparty Risk Assessment, or if not available, a proxy such as a private monitored rating, or in limited circumstances a low-volatility credit estimate; (3) adjusting the transaction's senior and subordinate note ratings given the credit enhancement available to protect those notes and the minimum credit enhancement necessary to support those ratings; and (4) deriving the final ratings of the notes considering other risks in the transaction, such as operational, counterparty and legal risks.

Moody's downgrade of the Counterparty Risk Assessments for the sponsoring banks resulted in an increase of the Aaa CE for the affected ABS transactions. Since Moody's uses the ratio of available credit enhancement to Aaa CE to rate subordinate notes, we reviewed the enhancement available to those notes for consistency with the existing ratings.

Methodology Underlying the Rating Actions:

The principal methodology used in these ratings was "Moody's Approach to Rating Credit Card Receivables-Backed Securities" published in June 2015. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

On 22 March 2017, Moody's released a Request for Comment, in which it has requested market feedback on potential revisions to its Approach to Assessing Counterparty Risks in Structured Finance. If the revised Methodology is implemented as proposed, the Credit Ratings on the CARDS II, Golden, Hollis, Trillium and MCCT II Notes are not expected to be affected. Please refer to Moody's Request for Comment, titled "Moody's Proposes Revisions to Its Approach to Assessing Counterparty Risks in Structured Finance," for further details regarding the implications of the proposed Methodology revisions on certain Credit Ratings.

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

Up

Moody's could upgrade the ratings of the securities if our expectation of the trust's performance following a sponsor default and portfolio shutdown (i.e., Aaa LGSD) improves materially, specifically, if the charge-off rate falls or the payment rate or yield rises. A decrease in Moody's assessment of the likelihood of the sponsor shutting down its credit card portfolio, generally reflected from an upgrade to the sponsor's CR Assessment, private monitored rating or low volatility credit estimate, as applicable, could also lead to an upgrade to the rating of the securities, because we use it to assess the likelihood of defaulting and shutting down its credit card portfolio.

Down

Moody's could downgrade the ratings of the securities if our expectation of the trust's performance following a sponsor default and portfolio shutdown (i.e., Aaa LGSD) deteriorates materially, specifically, if the charge-off rate rises or the payment rate or yield falls. An increase in Moody's assessment of the likelihood of the sponsor shutting down its credit card portfolio, generally reflected from a downgrade to the sponsor's CR Assessment, private monitored rating or low volatility credit estimate, as applicable, could also lead to a downgrade to the rating of the securities, because we use the rating of the sponsor to assess the likelihood of defaulting and shutting down its credit card portfolio.

Loss and Cash Flow analysis:

In rating these transactions, Moody's uses a cash flow model to determine the collateral losses in a maximum stress scenario. As a second step, Moody's haircuts such collateral losses based on the sponsor's credit quality. Finally, Moody's compares note available credit enhancement with the adjusted collateral losses, taking into account loss allocation and other structural features, to derive the expected loss for each rated instrument.

REGULATORY DISCLOSURES

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

Moody's either did not receive or take into account one or more third-party due diligence assessment(s) regarding the underlying assets or financial instruments (the "Due Diligence Assessment(s)") in this credit rating action.

The Due Diligence Assessment(s) referenced herein were prepared and produced solely by parties other than Moody's. While Moody's uses Due Diligence Assessment(s) only to the extent that Moody's believes them to be reliable for purposes of the intended use, Moody's does not independently audit or verify the information or procedures used by third-party due-diligence providers in the preparation of the Due Diligence Assessment(s) and makes no representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of the Due Diligence Assessment(s).

Moody's describes its loss and cash flow analysis in the section "Ratings Rationale" of this press release.

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

For ratings issued on a program, series 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.

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

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.

Aliya Ehmar
Associate Analyst
Structured Finance Group
Moody's Canada Inc.
70 York Street
Suite 1400
Toronto, ON M5J 1S9
Canada
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Richard Hunt
VP - Sr Credit Officer/Manager
Structured Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Canada Inc.
70 York Street
Suite 1400
Toronto, ON M5J 1S9
Canada
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
© 2017 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. 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.

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 SUCH 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 appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. 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. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

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 appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

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