Moodys.com
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 downgrades Bahrain's ratings to B2, maintains negative outlook

03 Aug 2018

Singapore, August 03, 2018 -- Moody's Investors Service ("Moody's") has today downgraded the Government of Bahrain's long-term issuer ratings to B2 from B1 and maintained the negative outlook.

The key driver for the rating downgrade is a further rise in Bahrain's external and government liquidity risks to particularly elevated levels, constraining access to market financing to a greater extent than Moody's previously envisaged. Despite higher oil prices over the past year, the government's gross borrowing needs remain very high and foreign exchange reserves very low. Meanwhile, heightened external and government liquidity pressures have not prompted the authorities to accelerate the implementation of fiscal reforms, which Moody's expects to remain very slow.

The B2 rating assumes that the kingdom's Gulf Cooperation Council (GCC) neighbors will provide some financial support, consistent with a broad statement issued on 27 June and without which Bahrain's creditworthiness would be significantly weaker.

The negative outlook reflects the risk that financial support from the GCC is not timely and comprehensive enough to maintain Bahrain's credit profile at B2 through a series of forthcoming debt repayments, including a $750 million sovereign sukuk repayment due on 22 November 2018.

Moody's has today also lowered Bahrain's long-term foreign-currency bond ceiling to Ba3 from Ba2 and long-term foreign-currency deposit ceiling to B3 from B2. The short-term foreign-currency bond and deposits ceiling remain unchanged at Not Prime. Bahrain's long-term local currency country risk ceilings were lowered to Ba2 from Ba1.

In addition, the long-term foreign-currency bond and deposit ceilings for Bahrain - Off Shore Banking Center were lowered to Baa2 from Baa1, while the short-term foreign-currency bond and deposit ceilings remain unchanged at Prime-2.

RATINGS RATIONALE

RATIONALE FOR THE DOWNGRADE

PERSISTENTLY HIGH EXTERNAL FINANCING NEEDS AND IMPAIRED ACCESS TO INTERNATIONAL MARKETS RAISE EXTERNAL AND LIQUIDITY RISKS FURTHER

Persistently high external financing needs for the government and the economy as a whole in the context of impaired access to the international capital markets indicate heightened external and government liquidity risks for Bahrain.

Moody's estimates that Bahrain's financing needs amount to more than 30% of GDP in 2018-20, a very high level internationally. Relatedly, Moody's continues to expect Bahrain's debt burden to rise to around 100% of GDP at the turn of the decade, from just under 90% in 2017. Assuming that domestic debt is refinanced, the government will need to finance $2.4 billion (around 6.5% of GDP) and $3 billion (7.5% of GDP) externally in the remainder of 2018 and in 2019 respectively. These domestic and external financing needs have not been reduced materially, despite higher oil prices over the past year that have most likely materially boosted government revenue.

In contrast with proven and repeated market access in the past several years, Moody's believes that the sovereign's ability to issue in the international capital markets has become impaired. In March this year the government abandoned its plan to issue both a conventional bond and a long-dated sukuk, and instead issued a $1 billion sukuk at a 7.5-year maturity. Furthermore, in May, the investment and development arm of Bahrain's government-owned National Oil and Gas Authority (nogaholding) abandoned plans to issue $1 billion of notes. Finally, in late June Bahrain's sovereign CDS spreads spiked to above 600 basis points (bps) -- a level previously only reached at the height of the global financial crisis -- from 250-300bps in the first quarter of the year.

Similarly, access to external financing is critical to prevent a further erosion in already very low foreign exchange reserves. Moody's estimates that, in the absence of new external debt issuance, the drain on Bahrain's reserves will amount to around $2.5 billion this year, rising to around $3.5 and $4 billion in 2019 and 2020 respectively. This is consistent with the fact that central bank reserves rose by less than $200 million during 2017 to $2.3 billion at the end of the year, even though the government issued $3.6 billion of international bonds and sukuk - in addition to a $500 million bond that was privately placed - and had no significant external debt repayments. Reserves have since fallen to $1.8 billion in May 2018, well short of Bahrain's external financing needs.

BAHRAIN'S CREDITWORTHINESS RELIANT ON FINANCIAL SUPPORT FROM GCC NEIGHBORS

Bahrain's B2 rating assumes that the kingdom's GCC neighbors will provide some financial support, consistent with a broad statement issued on 27 June that the Bahraini Ministry of Finance was in discussions with its GCC partners regarding various options that would support the kingdom's economic reforms and strengthen its financial stability. The GCC has in the past provided funds for some investment projects in Bahrain, as part of the GCC Development Fund, although disbursements have been slow.

In the absence of such support, Bahrain's creditworthiness would be significantly weaker as forthcoming debt payments would further deplete very thin buffers, threatening macroeconomic stability. Future debt payments include a $750 million sukuk maturing on 22 November 2018, an international bond repayment of $435 million due next May and an estimated $0.9 billion of sovereign external debt interest payments over the next 12 months.

LACK OF POLICY RESPONSE TO RISING LIQUIDITY PRESSURES UNDERSCORES LIMITED POLICY FLEXIBILITY

In the face of these credit challenges, the government has not announced any new significant policy measures that would indicate capacity to address weak and weakening fiscal and external credit metrics.

The implementation of the value-added tax, originally planned for 2018, has been postponed until next year. Meanwhile, in January all new fiscal austerity measures were suspended until parliament agrees on a new system to compensate citizens for the higher cost of living implied by the measures. The most significant fiscal measure implemented this year is the excise tax on soft drinks and tobacco products, which is expected to yield around 0.4% of GDP in extra revenue. By comparison, the government expects the overall spending to increase by close to 1% of GDP.

Moody's believes that the lack of new policy announcements in the face of rising liquidity pressures underscores very limited policy flexibility and weaker institutional strength than previously assessed. The overall policy response to lower oil prices has been slow in previous years and appears to remain so despite the fact that the urgency of some significant fiscal adjustment has increased.

MATERIALIZATION OF LONGER-TERM POTENTIAL FROM NEW OIL FIELD OR DIVERSIFICATION IS AS YET HIGHLY UNCERTAIN

Bahrain's creditworthiness continues to be supported by high per-capita income levels, a relatively diversified economy and a net international investment position, parts of which could provide some financial buffer to meet external payments (standing at $31 billion or 87% of GDP in 2017, albeit likely to continue to decline in coming years).

Bahrain also has potential, over time, to improve its fiscal and external metrics by tapping its recent oil discovery and by taking advantage of its relatively diversified economic base to diversify fiscal revenues. However, the degree to which this potential will be fulfilled is as yet highly uncertain.

Oil production from the recently discovered large off-shore oil reservoir will likely, in the long term, improve Bahrain's fiscal and external position. However, at the current stage of exploration, Moody's cannot ascertain with any degree of confidence how much of the announced 80 billion barrels of oil-in-place could be technically recoverable and at what cost. In any case, the government does not expect oil production from the new field that would materially improve Bahrain's fiscal and external balance to start before early 2023.

Also, in the longer term, and as part of its fiscal reforms, the government could harness the country's relatively diversified economic base -- with the non-hydrocarbon sector's share of value added at more than 85% -- to increase the size of its non-oil revenues. Unlike its GCC neighbors, Bahrain currently does not impose non-oil corporate income taxes on either national or foreign-owned companies. However, the authorities have so far shown no intention to introduce significant new non-oil revenue measures, including corporate or personal income taxes, that could diversify the government's revenue base. In 2017, 75% of all state budget revenue was derived from oil and gas production and most of the rest was due to miscellaneous fees, levies, duties and some dividends and property income transfers from the government's (mostly domestic) holdings managed by Mumtalakat and nogaholding.

RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook reflects the risk that financial support from the GCC is not timely and comprehensive enough to maintain Bahrain's credit profile at B2 through the series of forthcoming debt repayments.

Despite the 27 June announcement stating that an "integrated program [] will soon be announced", there has been no further communication to date, either from the Bahraini authorities or from Saudi Arabia (A1 stable), the UAE (Aa2 stable) and Kuwait (Aa2 stable).

As a result, there is a risk that such support may not be sufficient to stabilize Bahrain's credit metrics and in particular allow the government to meet its debt obligations while avoiding prohibitively expensive costs.

Support that is limited in size, disbursed slowly and/or not accompanied by clear and credible information about the timing and modality of disbursements may not restore Bahrain's access to international financial markets. With large financing needs projected to persist, Bahrain's creditworthiness would remain highly reliant on this GCC support, but with diminished confidence about its effectiveness. Limitations on the support that is provided would also potentially raise concerns about the sustainability of the currency peg, raising the probability of a balance of payments crisis.

WHAT COULD CHANGE THE RATING UP/DOWN

Given the negative outlook, an upgrade is unlikely in the near future. Moody's would likely change the outlook to stable if a detailed and credible announcement of GCC financial support was made and if such support raised the probability that the government would undertake comprehensive fiscal consolidation which would materially narrow non-oil fiscal deficits and stabilize its debt burden. Such a policy announcement would probably enable Bahrain to regain access to the international capital markets, diversifying its financing sources. Combined, the availability of GCC financial support and regained market access would provide some scope to rebuild the central bank's foreign exchange reserves.

Moody's would likely downgrade Bahrain's rating in the event of continued deterioration in fiscal and external metrics amid a prolonged absence of a detailed announcement from the GCC countries about the group's commitment to support Bahrain's government and external financing needs. Possibly related, a downgrade would also likely occur if the sustainability of Bahrain's pegged exchange rate regime was increasingly threatened.

GDP per capita (PPP basis, US$): 48,505 (2017 Actual) (also known as Per Capita Income)

Real GDP growth (% change): 3.8% (2017 Actual) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 1.4% (2017 Actual)

Gen. Gov. Financial Balance/GDP: -15% (2017 Actual) (also known as Fiscal Balance)

Current Account Balance/GDP: -4.5% (2017 Actual) (also known as External Balance)

External debt/GDP: 181% (2017 Actual)

Level of economic development: Moderate level of economic resilience

Default history: No default events (on bonds or loans) have been recorded since 1983.

SUMMARY OF MINUTES FROM RATING COMMITTEE

On 30 July 2018, a rating committee was called to discuss the rating of the Bahrain, Government of. The main points raised during the discussion were: The issuer's institutional strength/framework, have materially decreased. The issuer has become increasingly susceptible to event risks. Other views raised included: The issuer's economic fundamentals, including its economic strength, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has not materially changed.

The principal methodology used in these ratings was Sovereign Bond Ratings published in December 2016. 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.

Martin Petch
VP - Senior Credit Officer
Sovereign Risk Group
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077

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

Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077

No Related Data.
© 2020 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/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S 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 INVESTORS SERVICE 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 INVESTORS SERVICE 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.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND 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, ASSESSMENTS, OTHER OPINIONS OR  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.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND 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 its 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, ASSESSMENT, 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 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 $2,700,000. 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 JPY125,000 to approximately JPY250,000,000.

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

​​​​​​​​
Moodys.com