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Rating Action:

Moody's affirms six classes of UBSCM 2018-C13

02 Mar 2021

Approximately $511.9 million of structured securities affected

New York, March 02, 2021 -- Moody's Investors Service, ("Moody's") has affirmed the ratings on six classes in UBS Commercial Mortgage Trust 2018-C13, Commercial Mortgage Pass-Through Certificates, Series 2018-C13 as follows:

Cl. A-2, Affirmed Aaa (sf); previously on Oct 16, 2018 Definitive Rating Assigned Aaa (sf)

Cl. A-3, Affirmed Aaa (sf); previously on Oct 16, 2018 Definitive Rating Assigned Aaa (sf)

Cl. A-4, Affirmed Aaa (sf); previously on Oct 16, 2018 Definitive Rating Assigned Aaa (sf)

Cl. A-S, Affirmed Aa2 (sf); previously on Oct 16, 2018 Definitive Rating Assigned Aa2 (sf)

Cl. A-SB, Affirmed Aaa (sf); previously on Oct 16, 2018 Definitive Rating Assigned Aaa (sf)

Cl. X-A*, Affirmed Aaa (sf); previously on Oct 16, 2018 Definitive Rating Assigned Aaa (sf)

* Reflects interest-only classes

RATINGS RATIONALE

The ratings on the P&I classes were affirmed because the transaction's key metrics, including Moody's loan-to-value (LTV) ratio, Moody's stressed debt service coverage ratio (DSCR) and the transaction's Herfindahl Index (Herf), are within acceptable ranges.

The rating on the IO class, Cl. X-A was affirmed based on the credit quality of the referenced classes.

The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Our analysis has considered the effect on the performance of commercial real estate from the current weak US economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around our forecasts is unusually high. Stress on commercial real estate properties will be most directly stemming from declines in hotel occupancies (particularly related to conference or other group attendance) and declines in foot traffic and sales for non-essential items at retail properties.

We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety.

Moody's rating action reflects a base expected loss of 8.6% of the current pooled balance, compared to 5.3% at securitization. Moody's base expected loss plus realized losses is now 8.0% of the original pooled balance. Moody's provides a current list of base expected losses for conduit and fusion CMBS transactions on moodys.com at http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF215255.

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

The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. Performance that falls outside the given range can indicate that the collateral's credit quality is stronger or weaker than Moody's had previously expected.

Factors that could lead to an upgrade of the ratings include a significant amount of loan paydowns or amortization, an increase in the pool's share of defeasance or an improvement in pool performance.

Factors that could lead to a downgrade of the ratings include a decline in the performance of the pool, loan concentration, an increase in realized and expected losses from specially serviced and troubled loans or interest shortfalls.

METHODOLOGY UNDERLYING THE RATING ACTION

The principal methodology used in rating all classes except interest-only classes was "Approach to Rating US and Canadian Conduit/Fusion CMBS" published in September 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_1244778. The methodologies used in rating interest-only classes were "Approach to Rating US and Canadian Conduit/Fusion CMBS" published in September 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_1244778 and "Moody's Approach to Rating Structured Finance Interest-Only (IO) Securities" published in February 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_1111179. Please see the list of ratings at the top of this announcement to identify which classes are interest-only (indicated by the *). Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

DEAL PERFORMANCE

As of the February 18, 2021 distribution date, the transaction's aggregate certificate balance has decreased by 7% to $663.8 million from $714.9 million at securitization. The certificates are collateralized by 51 mortgage loans ranging in size from less than 1% to 7% of the pool, with the top ten loans (excluding defeasance) constituting 44% of the pool. Three loans, constituting 16% of the pool, have investment-grade structured credit assessments.

Moody's uses a variation of Herf to measure the diversity of loan sizes, where a higher number represents greater diversity. Loan concentration has an important bearing on potential rating volatility, including the risk of multiple notch downgrades under adverse circumstances. The credit neutral Herf score is 40. The pool has a Herf of 32, compared to Herf of 34 at Moody's last review.

As of the February 2021 remittance report, loans representing 85% were current or within their grace period on their debt service payments, 1% were beyond their grace period but less than 30 days delinquent and 4% were 60 days delinquent and 9% were 90+ days delinquent.

Fifteen loans, constituting 28% of the pool, are on the master servicer's watchlist, of which six loans, representing 10% of the pool, indicate the borrower has requested relief or received loan modifications in relation to coronavirus impact on the property. The watchlist includes loans that meet certain portfolio review guidelines established as part of the CRE Finance Council (CREFC) monthly reporting package. As part of Moody's ongoing monitoring of a transaction, the agency reviews the watchlist to assess which loans have material issues that could affect performance.

No loans have been liquidated from the pool. Four loans, constituting 11% of the pool, are currently in special servicing, all of which have transferred since April 2020.

The largest specially serviced loan is the Buckingham Loan ($45.3 million -- 6.8% of the pool), which is secured by the borrower's fee simple interest in a high-rise student housing complex located in the South Loop neighborhood of Chicago, IL. The complex is of Class A quality, consisting of a 27-story building featuring 454 beds (129 units) and 4,665 square feet (SF) of ground floor retail. A total of 221 beds (48.7% of total beds) are master leased to The School of the Art Institute of Chicago ("SAIC") on a one-year term and must be renewed annually. The master lease agreement has been in place with SAIC since 2013. As of March 2020, the property was 83% occupied compared to 97% in 2019 and 98% at securitization. The loan transferred to special servicing in July 2020 due to payment default in relation to the coronavirus pandemic. The special servicer is currently in discussions with the borrower regarding a potential loan modification while dual tracking the foreclosure process and receivership filing. The loan was originally structured with a 36-month partial-term IO period with six months remaining and is current through its September 2020 payment date.

The second largest specially serviced loan is the Aspect RHG Hotel Portfolio Loan ($12.7 million -- 1.9% of the pool), which represents a pari-passu portion of a $46.2 million mortgage loan. The loan is secured by four limited-service hotels totaling 461-rooms located across Colorado, Tennessee and Arizona. The collateral includes a 139-room Aloft Broomfield, located in Broomfield, CO, an 83-room Hampton Inn & Suites Nashville Smyrna located in Smyrna, TN, a 112-room Hilton Garden Inn Nashville Smyrna, located in Smyrna, TN and a 127-room Hyatt Place Phoenix North, located in Phoenix, AZ. As of September 2020, the portfolio was 45% occupied compared to 75% in 2019 and 78% in 2018. The loan transferred to special servicing in October 2020 due to the delinquent payments as a result to disruptions in relation to the coronavirus pandemic. The special servicer is currently in discussions with the borrower regarding a potential loan modification while dual tracking the foreclosure process and receivership filing. The loan was originally structured with a 36-month partial-term IO period with six months remaining and is current through its October 2020 payment date.

The third largest specially serviced loan is the Country Inn & Suites Gainesville Loan ($8.2 million -- 1.2% of the pool), which is secured by a 90-room limited-service hotel located in Gainesville, FL. As of December 2020, the property was 52% occupied compared to 75% in 2019 and 80% in 2018. As of December 2019, the property's net operating income (NOI) had declined 17% when compared to 2018 and 37% when compared to the underwritten NOI. According to the borrower, the decline in property performance was driven by an increase in room supply in the market. The loan transferred to special servicing in September 2020 due to payment default. The special servicer has approved a forbearance agreement with the borrower and the loan is being monitored for return to the master servicer. The loan has amortized 3.2% since securitization and is current through its November 2020 payment date.

The remaining specially serviced loan is secured by a limited-service hotel and represents less than 1% of the pool.

Moody's has also assumed a high default probability for two poorly performing loans, constituting 1.3% of the pool, and has estimated an aggregate loss of $20.0 million (a 25% expected loss on average) from these specially serviced and troubled loans.

The credit risk of loans is determined primarily by two factors: 1) Moody's assessment of the probability of default, which is largely driven by each loan's DSCR, and 2) Moody's assessment of the severity of loss upon a default, which is largely driven by each loan's loan-to-value ratio, referred to as the Moody's LTV or MLTV. As described in the CMBS methodology used to rate this transaction, we make various adjustments to the MLTV. We adjust the MLTV for each loan using a value that reflects capitalization (cap) rates that are between our sustainable cap rates and market cap rates. We also use an adjusted loan balance that reflects each loan's amortization profile. The MLTV reported in this publication reflects the MLTV before the adjustments described in the methodology.

Moody's received full year 2019 operating results for 100% of the pool, and full or partial year 2020 operating results for 83% of the pool (excluding specially serviced and defeased loans). Moody's weighted average conduit LTV is 122%, compared to 120% at Moody's last review. Moody's conduit component excludes loans with structured credit assessments, defeased and CTL loans, and specially serviced and troubled loans. Moody's net cash flow (NCF) reflects a weighted average haircut of 19% to the most recently available net operating income (NOI). Moody's value reflects a weighted average capitalization rate of 10.4%.

Moody's actual and stressed conduit DSCRs are 1.40X and 0.94X, respectively, compared to 1.40X and 0.95X at the last review. Moody's actual DSCR is based on Moody's NCF and the loan's actual debt service. Moody's stressed DSCR is based on Moody's NCF and a 9.25% stress rate the agency applied to the loan balance.

The largest loan with a structured credit assessment is the 1670 Broadway Loan ($48.0 million -- 7.2% of the pool), which represents a pari-passu portion of a $78.0 million mortgage loan. The loan is secured by the borrower's fee simple and leasehold interests in a 703,654 SF Class A, 36-story office tower located in the central business district of Denver, CO. The property also consists of an eight-story parking garage with 519 parking spaces which is operated by a third party. The collateral was originally built in 1980 and most recently renovated in 2018. The largest tenant at the property, Teachers Insurance and Annuity Association ("TIAA"), makes up 42% of the net rentable area (NRA) and has been in-place at the property since 2001. TIAA amended their lease in 2016, extending their term through December 2029 and has two, five-year renewal options remaining. The second largest tenant is U.S. Department of Housing and Urban Development ("HUD") (12% of NRA) which has tenanted the property since 2003 and operates subject to a lease that expires in December 2028. HUD has the right to terminate its lease at any time after December 31, 2023 with 120 days' notice with no termination fee. The third largest tenant is HDR Engineering (8% of NRA) recently extended their lease term an additional six years with a lease expiration in October 2026. HDR Engineering has two, five-year renewal options remaining and no termination options. Property performance has improved since securitization. As of September 2020, the property was 91% occupied compared to 90% in 2019 and 87% at securitization. The loan is full-term IO and does not benefit from amortization. Moody's structured credit assessment and stressed DSCR are baa2 (sca.pd) and 1.59X, respectively.

The second largest loan with a structured credit assessment is the Christiana Mall Loan ($30.0 million -- 4.5% of the pool), which represents a pari-passu portion of a $338.0 million mortgage loan. Additionally, the property is encumbered by $212 million of secured subordinate debt held outside the trust. The loan is secured by the borrower's fee and leasehold interest in a 779,084 SF portion of a 1,275,084 SF superregional mall in Newark, DE. The property is located approximately 8.7 miles southwest of the Wilmington central business district and immediately off Interstate 95, benefiting from its own dedicated exit (4A -- Mall Rd). The mall is anchored by a Macy's, JCPenney and Nordstrom all of which are not part of the collateral. Additional collateral anchors include a Target, Cabela's (subject to a ground lease) and a Cinemark theatre. Major in-line tenants at the property include Apple, Anthropologie, Barnes & Noble, H&M, Microsoft, Victoria's Secret and XXI Forever, among others. Both Barnes & Nobles and XXI Forever both extended their lease terms in 2020 by an additional five and three years, respectively. As of June 2020, the total property was 98% occupied with the inline space 95% occupied. As of the March 2020 trailing twelve months (TTM) sales report, inline space below 10,000 SF excluding food, jewelry and Apple was $592 PSF compared to $622 PSF as of December 2019. The loan is full-term IO and does not benefit from amortization. Moody's structured credit assessment and stressed DSCR are baa1 (sca.pd) and 1.35X, respectively.

The third largest loan with a structured credit assessment is the Wyvernwood Apartments Loan ($28.0 million -- 4.2% of the pool), which represents a pari-passu portion of a $78.0 million mortgage loan. The loan is secured by the borrower's fee interest in a 1,175-unit garden-style multifamily property located in Los Angeles, CA, approximately one-half a mile south of the Golden Gate (Interstate 5) Freeway. The property encompasses approximately nine city blocks located between East Olympic Boulevard on the south, and Eighth Street on the north. The collateral improvements are comprised of 151 residential buildings that were built from 1939 to 1963 and renovated between 1998 and 2000. The property operates subject to the City of Los Angeles Rent Stabilization Ordinance (RSO). As of September 2020, the property was 98% occupied, unchanged since securitization. The loan is full-term IO and does not benefit from amortization. Moody's structured credit assessment and stressed DSCR are baa2 (sca.pd) and 1.3X, respectively.

The top three conduit loans represent 12% of the pool balance. The largest loan is the Lower Makefield Corporate Center -- South Loan ($33.7 million -- 5.1% of the pool), which is secured by the borrower's fee simple interest in three Class A, low-rise office buildings totaling 276,533 SF, located in Yardley, PA. The properties were built between 2001 and 2006. The collateral comprises 72% of the Lower Makefield Corporate Center -- South Campus Condominium. The remaining 28% share, represented by building 780 Township Road, is not part of the collateral. The largest collateral tenant, Crown Cork & Seal, comprises 21% of the NRA and has a lease expiration in September 2029 with two 5-year renewal options and no termination options. The tenants lease was structured with a 10-month free rent period that expired in July 2019. Property performance has improved since securitization. As of September 2020, the property was 83% occupied with an NOI DSCR of 2.35x. The loan was originally structured with a 60-month partial-term IO period and has 31 months remaining. Moody's LTV and stressed DSCR are 122% and 0.91X, respectively, the same as at last review.

The second largest loan is the Village at Beech Hill Loan ($27.2 million -- 4.1% of the pool), which is secured by the borrower's fee interest in a 320-unit multifamily complex located in Manchester, NH approximately 3-miles south of downtown Manchester. The collateral improvements are comprised of 13 two-story townhome-style buildings, 4 three-story apartment buildings, 2 single-story amenity buildings that include the clubhouse and leasing office, and 380 surface parking spaces. The subject in encumbered by a Land Use Restriction Agreement ("LURA") for Low Income Housing Tax Credits ("LIHTC"), which requires 40% of the units to be set aside for tenants earning no more than 60% of the Median Area Income ("MAI"). The property also holds a Housing Assistance Payments ("HAP") renewal contract with the New Hampshire Housing Financing Authority which provides payment to the owner the difference between the contract rent and the eligible tenant's contribution as defined by HUD. Per the contract, 63 units are required to be leased to low income tenants that qualify for a Section 8 HAP voucher. The property was 92% occupied as of September 2020 compared to 96% in 2019. Property performance has been stable since securitization, but below the underwritten NOI due to increase in expenses. The loan was originally structured with a 36-month partial-term IO period and has 7 months remaining. Moody's LTV and stressed DSCR are 135% and 1.04X, respectively, compared to 118% and 1.25X at the last review.

The third largest loan is the Silverado Ranch Place Loan ($20.9 million -- 3.2% of the pool), which is secured by the borrower's fee interest in a 188,197 SF, shadow-anchored shopping center in Las Vegas, NV located approximately 10 miles southeast of the Las Vegas Strip. The property also includes two stories of office space (five units) that account for 14% of the NRA. The collateral is shadow-anchored by a Smith's grocery store and three non-collateral pad-sites including a McDonald's, KFC and PT Pub. The three largest collateral tenants include Planet Fitness (16% of NRA), Santa's Wrap (8% of NRA) and Dollar Tree (5% of NRA) with the earliest lease expiration in January 2023. The second largest tenant at securitization, State of Nevada (9% of NRA) which occupied two of the office units vacated the premises at lease expiration in December 2018. As of December 2020, the property was 82% occupied compared to 75% in 2019 and 83% in 2018. The loan has amortized 3% since securitization. Moody's LTV and stressed DSCR are 119% and 0.97X, respectively, compared to 111% and 1.03X at the last review.

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.

The analysis includes an assessment of collateral characteristics and performance to determine the expected collateral loss or a range of expected collateral losses or cash flows to the rated instruments. As a second step, Moody's estimates expected collateral losses or cash flows using a quantitative tool that takes into account credit enhancement, loss allocation and other structural features, to derive the expected loss for each rated instrument.

Moody's did not use any stress scenario simulations in its analysis.

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_1243406.

At least one ESG consideration was material to the credit rating action(s) announced and described above.

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.

The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK 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.

Yoni Lobell
Associate Lead Analyst
Structured Finance 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

Romina Padhi
VP - Senior Credit Officer
Structured Finance 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.
© 2022 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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Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service 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 credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY100,000 to approximately JPY550,000,000.

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

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