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 Hertz Corporation's rental car ABS

29 May 2020

Approximately $4.3 billion asset backed securities affected

NOTE: On August 18, 2020, the press release was corrected as follows: The second sentence of the seventh paragraph of the Ratings Rationale section was changed to: “ Firstly, Hertz failed to make full monthly lease payments to the Issuer in April and May, triggering an amortization event under the transaction documents that govern the ABS and eroding the level of credit enhancement supporting the notes.” Revised release follows.

New York, May 29, 2020 -- Moody's Investors Service (Moody's) has downgraded 11 tranches of rental car asset-backed securities (ABS) issued by Hertz Vehicle Financing II LP (HVF II, or the Issuer). All 11 tranches remain on review for possible further downgrade. HVF II is a special purpose limited partnership and wholly-owned indirect subsidiary of The Hertz Corporation (Hertz; Ca). HVF II is Hertz's rental car securitization platform in the U.S. The ultimate collateral backing the notes is a fleet of vehicles and a single lease of the fleet to Hertz for use in its rental car business.

Moody's actions on the ABS are primarily prompted by 1) Hertz's Chapter 11 bankruptcy filing on 22 May 2020, without a pre-negotiated plan with noteholders to amend the lease, and the high likelihood of a liquidation of all or a large portion of the fleet of vehicles following the bankruptcy filing, 2) increased risk around the amount of proceeds that will be derived from the sale of the vehicle fleet and sale timing, given the challenging market conditions that the used car market continues to face as a result of the COVID-19-induced shock, and 3) uncertainty related to the outcome of the bankruptcy.

Complete rating actions are as follows:

Issuer: Hertz Vehicle Financing II LP, Series 2015-3

Series 2015-3 Rental Car Asset Backed Notes, Class A, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on Apr 27, 2020 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade

Issuer: Hertz Vehicle Financing II LP, Series 2016-2

Series 2016-2 Rental Car Asset Backed Notes, Class A, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on Apr 27, 2020 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade

Issuer: Hertz Vehicle Financing II LP, Series 2016-4

Series 2016-4 Rental Car Asset Backed Notes, Class A, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on Apr 27, 2020 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade

Issuer: Hertz Vehicle Financing II LP, Series 2017-1

Class A Notes, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on Apr 27, 2020 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade

Issuer: Hertz Vehicle Financing II LP, Series 2017-2

Class A Notes, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on Apr 27, 2020 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade

Issuer: Hertz Vehicle Financing II LP, Series 2018-1

Class A Notes, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on Apr 27, 2020 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade

Issuer: Hertz Vehicle Financing II LP, Series 2018-2

Class A Notes, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on Apr 27, 2020 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade

Issuer: Hertz Vehicle Financing II LP, Series 2018-3

Class A Notes, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on Apr 27, 2020 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade

Issuer: Hertz Vehicle Financing II LP, Series 2019-1

Class A Notes, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on Apr 27, 2020 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade

Issuer: Hertz Vehicle Financing II LP, Series 2019-2

Class A Notes, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on Apr 27, 2020 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade

Issuer: Hertz Vehicle Financing II LP, Series 2019-3

Class A Notes, Downgraded to Baa3 (sf) and Remains On Review for Possible Downgrade; previously on Apr 27, 2020 Downgraded to A1 (sf) and Placed Under Review for Possible Downgrade

RATINGS RATIONALE

In taking today's rating actions, Moody's considered:

(1) The high likelihood of a liquidation of all or a large portion of the fleet of vehicles, following Hertz's Chapter 11 bankruptcy filing on 22 May 2020 without a pre-negotiated plan with noteholders to amend the lease, and which did not include the special purpose vehicles of the ABS transactions;

(2) A significant increase in our assumed haircut to the net book value of the non-program vehicles to reflect greater uncertainty for current and future used car market conditions, including prices and volumes;

(3) The assumed available credit enhancement of 32%, which is a 4% decline from the month of March, owing to the missed lease payments in April and May; and

(4) Other qualitative and quantitative factors, such as legal uncertainty involving bankruptcy court decisions and the timing of liquidations.

On 27 April 2020, Moody's downgraded the affected notes to A1 (sf) from Aaa (sf) and placed the ratings under review for possible downgrade, following the downgrade of Hertz's corporate family rating (CFR) to Caa3 (negative outlook) from B3 (negative outlook) on 24 April 2020.

In its ABS ratings analysis, Moody's assessed the combined effect of new developments that have occurred since its prior rating actions. Firstly, Hertz failed to make full monthly lease payments to the Issuer in April and May, triggering an amortization event under the transaction documents that govern the ABS and eroding the level of credit enhancement supporting the notes. Secondly, Hertz announced on 22 May 2020 that it was unable to secure longer-term lease payment relief with VFN and ABS noteholders (the company had secured short-term relief from VFN noteholders initially). Thirdly, on 22 May 2020 Hertz filed for Chapter 11 bankruptcy reorganization without a pre-negotiated plan with noteholders to amend the lease. The Issuer and its parent, Hertz Vehicle Financing (the lessor), were not included in the Chapter 11 bankruptcy filing. The lessor is a wholly owned subsidiary of Hertz.

Moody's assumes the liquidation of the entire fleet of vehicles to be highly likely following Hertz's bankruptcy proceedings. While Moody's recognizes the strategic importance of the underlying vehicles and the ABS financing platform to Hertz's operations, it is highly unlikely that the company could sustain all current lease payment obligations, owing to Hertz's current liquidity position, dire financial situation and low fleet utilization. Prospects for alternative outcomes are uncertain and may include Hertz and the noteholders agreeing to restructure the lease terms while Hertz is in bankruptcy, subject to the bankruptcy court and the creditors' committee. Hertz would benefit from liquidating a large portion of its fleet, given the depressed demand for rental cars, in return for a reduced lease payment.

Today's rating actions also reflect Moody's more stressful assumed haircut to the vehicle liquidation prices of non-program vehicles to reflect the greater uncertainty around those prices. The fleet disposition will likely coincide with challenging market conditions, including (1) possibly lower demand for used vehicles resulting from the reduced mobility of the population due to the pandemic and the recession that will continue to squeeze consumers' finances and disposable income, which may, in turn, affect prices, (2) a relatively high supply of used vehicles available for sale as highly over-fleeted rental car companies sell large portions of their fleets in response to lower utilization, which will likely continue to affect prices, and (3) the lingering effects of the fragile, though gradually improving, conditions in the wholesale used-vehicle market and auction channels.

The car rental sector has been one of the worst-hit by the COVID-19-induced credit shock due to the sudden and dramatic decline in air travel volumes and the shutdown of certain used vehicle sales channels, the scope and magnitude of which are unprecedented. Business activity in these markets, which are critical to Hertz's ongoing operations, fell precipitously following the outbreak of COVID-19 in the U.S., thereby resulting in a large monthly operating cash burn and a liquidity shortfall, as well as an abrupt decline in revenue and future bookings. Unlike the US airline industry, the US rental car industry has not secured direct government assistance in the wake of the pandemic.

During late March and into April the normally quite stable and large market for used cars contracted at an unprecedented pace given the closure of most auctions and other sales channels. In recent weeks, the market has gradually recovered, with wholesale auction sales volumes reaching around 82% of pre-COVID-19 expectations as of the week ending 17 May 2020 according to J.D. Power[1]. Moody's Analytics reported a cumulative wholesale used vehicle price decline since the outbreak of the pandemic of 17.6% in 2020 and through 13 May 2020[2].

In its modeling analysis, Moody's assumed a simulated haircut to the fleet's net book value with a distribution that addresses the potential variability associated with the disposal of the fleet. The longer the actual liquidation period, the greater the erosion of credit enhancement available to support the senior notes owing to depreciation. However, more favorable market conditions may arise over a longer timeframe, potentially leading to higher used vehicle sales prices than those implied by the assumed haircut. Alternatively, a shorter liquidation period would lead to lower credit enhancement erosion due to depreciation. However, the full liquidation of this large fleet within a concentrated period could depress used-vehicle sales prices and sale proceeds, especially as other rental car companies de-fleet.

Moody's haircuts reflect (1) the potential effects of vehicle depreciation during a three-month automatic stay in Hertz's bankruptcy and the liquidation period, (2) declines in used vehicle prices, (3) vehicle theft or damage during the bankruptcy stay and liquidation period, and (4) the possibility that vehicle manufacturer bankruptcies could depress used-vehicle values for the defaulting manufacturers.

During the review period, Moody's will continue to monitor and assess:

(1) Market conditions, including rental fleet utilization, the liquidity of the used-vehicle secondary markets, trends in the demand for used-vehicles and their prices, including further disruptions from COVID-19;

(2) Fleet liquidation outcomes, including the level of depreciation of the fleet during the liquidation process, the amount of liquidation proceeds, disposition timelines, and whether proceeds from disposing vehicles is expected to result in sufficient funds to make the required payments on the ABS by the notes' legal final maturity dates (rated notes mature as early as September 2021);

(3) Legal and operational risks, including the effectiveness of decision-making among Hertz and the noteholders, the performance and capabilities of key counterparties including the back-up disposition agent, the servicer, the administrator and the trustee, the effectiveness of any transfer mechanisms to ensure back-up arrangements are in place for vehicle disposition and administration, and the impact of any heightened risks on liquidation timelines, disposition proceeds, and the quantitative analysis;

(4) Credit enhancement available to the notes, as over-collateralization in the form of vehicles and as measured by the net book value of the vehicle fleet;

(5) Payment disruption risks and the sufficiency of funds available under the letters of credit (LOCs) initially sized to cover roughly six months of trust expenses and interest due on the notes. The Issuer has drawn on the LOCs to cover note interest payments following Hertz's missed lease payments;

Our analysis has considered the effect of the coronavirus outbreak on the US economy, as well as the effects that the announced government measures, put in place to contain the virus, will have on the performance of corporate assets. The contraction in economic activity in the second quarter will be severe and the overall recovery in the second half of the year is expected to be gradual. However, there are significant downside risks to Moody's forecasts in the event that the pandemic is not contained, and lockdowns have to be reinstated. As a result, the degree of uncertainty around the forecasts is unusually high. We regard the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety.

Below are some of the key assumptions Moody's applied in its quantitative analysis in various scenarios:

Probability of sponsor default: 100%

Probability of liquidation of fleet following bankruptcy: 100%

Disposal value of the fleet: Moody's assumed the following haircuts to the last reported net book value (NBV) of the vehicle fleet ($12.2 billion):

Non-Program Haircut upon Sponsor Default: Mean: 30% - 35%

Non-Program Haircut upon Sponsor Default: Standard Deviation: 6% - 10%

Fixed Program Haircut upon Sponsor Default: 10%

Additional Fixed Non-Program Haircut upon Manufacturer Default: 20%

Non-program Manufacturer Concentration (percentage, number of manufacturers, assumed rating):

Aa/A Profile: 25%, 2, A3

Baa Profile: 40%, 2, Baa3

Ba/B Profile: 35%, 1, Ba3

Program Manufacturer Concentration (percentage, number of manufacturers, assumed rating):

Aa/A Profile: 0%, 0, A3

Baa Profile: 70%, 1, Baa3

Ba/B Profile: 30%, 1, Ba3

Correlation: Moody's applied the following correlation assumptions:

Correlation among the sponsor and the vehicle manufacturers: 10%

Correlation among all vehicle manufacturers: 25%

Default risk horizon: Moody's assumed the following default risk horizon:

Sponsor: 5 years (though 100% probability of default)

Manufacturers: 1 year

A fixed set of time horizon assumptions, regardless of the remaining term of the transaction, is used when considering sponsor and manufacturer default probabilities and the expected loss of the related liabilities, which simplifies Moody's modeling approach using a standard set of benchmark horizons. Detailed application of the assumptions are provided in the methodology.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was "Moody's Global Approach to Rating Rental Fleet Securitizations" published in March 2019 and available at https://www.moodys.com/research/Moodys-Global-Approach-to-Rating-Rental-Fleet-Securitizations--PBS_1111706. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

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

Up

Moody's could upgrade the ratings of the notes as applicable if, among other things, (1) the outcome of the bankruptcy process is favorable to Class A noteholders owing to a controlled liquidation of the vehicles in a sustained liquid market, (2) the credit quality of the lessee improves, (3) a sustained improvement in the car rental market results in higher utilization of the vehicle fleet, and (4) a sustained improvement in the demand for used vehicles results in higher volumes and prices above Moody's assumed depreciation.

Down

Moody's could downgrade the ratings of the notes if, among other things, (1) the outcome of the bankruptcy process is unfavorable to Class A noteholders, for example, one that results in an extended timeline to liquidate the vehicles coinciding with a sustained weakness in the used-vehicle market combined with prolonged disruptions to used-car sales channels, (2) reduced demand for used vehicles results in lower volumes and sharp declines in used vehicle prices above Moody's assumed depreciation, (3) increased operational and legal risks during the bankruptcy process adversely affects Class A noteholders, or (4) the tail periods, particularly for the series 2015-3 and 2017-1 notes that have maturities in 2021, are insufficient for vehicle disposition proceeds to repay the notes owing to prolonged closures of sales channels or other reasons.

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.

In rating this transaction, Moody's used a cash flow model to model cash flow stress scenarios to determine the extent to which investors would receive timely payments of interest and principal in the stress scenarios, given the transaction structure and collateral composition.

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. Moody's weights the impact on the rated instruments based on its assumptions of the likelihood of the events in such scenarios occurring.

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.

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.

REFERENCES/CITATIONS

[1] COVID-19 Valuation Services Update, J.D. Power, 22-May-2020

[2] Auto Market Update, Moody's Analytics, 13-May-2020

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.

Arti Mattu
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

Karen Ramallo
Senior Vice President/Manager
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.
© 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.

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 $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 JPY125,000 to approximately JPY550,000,000.

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

Moodys.com