Moodys.com
Close
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
Related Issuers
Related Research
Announcement:

Moody's updates several structured finance rating methodologies in light of its new counterparty risk assessment for banks

16 Mar 2015

Generally positive rating impact on structured finance transactions

New York, March 16, 2015 -- Moody's Investors Service has updated several cross-sector, primary and secondary rating methodologies for structured finance securities, to incorporate a new counterparty risk (CR) Assessment that it has introduced for banks as part of its revised bank rating methodology (http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_179038).

The updates to the structured finance rating methodologies will generally have a positive rating impact on structured finance transactions. In the coming days, Moody's will issue separate announcements that will provide details on these implications. Moody's expects to conclude the majority of the structured finance rating reviews in the first half of 2015. The timeline to resolve these reviews will depend on the resolution process applied to the underlying bank ratings, as well as the assignment of CR Assessments.

The CR Assessment reflects an issuer's ability to avoid defaulting on certain senior operating bank obligations and other contractual commitments, but it is not a rating. The CR Assessment takes into account the issuer's standalone strength as well as the likelihood of affiliate and government support in the event of need, reflecting the anticipated seniority of counterparty obligations in the liabilities hierarchy. The CR Assessment also takes into account other steps authorities can take to preserve the key operations of a bank in a resolution.

Obligations and commitments that CR Assessments typically take into account include payment obligations associated with covered bonds (and certain other secured transactions), derivatives, letters of credit, third party guarantees, servicing and trustee obligations and other similar operational obligations that arise from a bank in performing its essential customer-serving operating functions.

The revised methodologies implement the proposals outlined in Moody's Request for Comment "Updates to Structured Finance Rating Methodologies Resulting from New Counterparty Risk Measure," published on 8 January 2015 (http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF392314).

A full list of the updated structured finance credit rating methodologies is available at the end of this press release.

CR ASSESSMENTS WILL BE ASSIGNED OVER TIME AND APPROXIMATED VALUES DEPEND ON THE JURISDICTION

Although Moody's will assign the CR Assessments to banks over time, the rating agency will immediately start using approximations for CR Assessments as inputs into its credit analysis for structured finance transactions. The approximate values will be used up to the point when Moody's assigns a CR Assessment. CR Assessments will be expressed on alpha-numeric scales that correspond to the alpha-numeric ratings of the global long-term and short-term rating scales, with a "(cr)" modifier appended to the CR Assessment symbols.

Moody's uses internal guidance on the CR Assessments to assess the rating impact on outstanding structured finance transactions. The internal guidance is in line with the guidance published in its updated bank rating methodology and it its responses to frequently asked bank methodology related questions.

More specifically, the position of the CR Assessment relative to rated instruments will depend on a bank's jurisdiction.

- In the European Union, Norway and Liechtenstein, the CR Assessment will generally be at least as high as the deposit rating.

- In Switzerland, the CR Assessment will generally be at least as high as the senior unsecured debt rating.

- For US banks subject to Title I under the Dodd-Frank Act, the CR Assessment will generally be one notch higher than the baseline credit assessment (BCA).

- For US banks subject to Title II under the Dodd-Frank Act, the CR Assessment will generally be at least as high as the senior unsecured debt rating.

- Outside operational resolution regimes, the CR Assessment will generally be no lower than the bank deposit rating.

In all cases, the CR Assessment will be subject to a cap of the lower of the local currency deposit ceiling, or the local government bond rating plus one notch, or plus two notches where the adjusted BCA itself already above the government bond rating.

Where relevant, the approximate CR Assessment values used in structured finance credit analysis will factor in guidance on expected changes to the BCA, senior unsecured debt and bank deposit ratings.

KEY UPDATES TO THE CROSS SECTOR RATING METHODOLOGIES

Moody's has updated several of its cross sector methodologies to explain how it uses CR Assessments in its analysis of structured finance transactions. For example, it now uses CR Assessments to measure the risk of default for (1) operational risk exposures (including exposures to servicers, cash managers and trustees); (2) exposures to swap counterparties; and (3) exposures to servicers in relation to commingling risk. If a bank does not have a CR Assessment -- either because it has not yet been assigned or is not expected to be assigned -- Moody's uses the approximated CR Assessment or an alternative proxy, which it may derive from other rating reference points.

Moody's has also clarified that it uses alternative reference points to measure the default risk for certain other exposures. For example, its methodology on the temporary use of cash now distinguishes between the use of senior unsecured debt ratings for eligible investments, and deposit ratings for bank deposits. Similarly, Moody's methodologies for assessing set-off risk in Europe, the Middle East and Africa (EMEA) and Australia, now reference a country's local country risk ceiling to measure the default risk associated with its deposit guarantee scheme.

For bank-related exposures, e.g. deposits held at a defaulting bank, Moody's now assumes a recovery rate of 45% in the instances when the risk is measured or modelled.

TREATMENT OF TRIGGERS IN STRUCTURED FINANCE TRANSACTIONS

The updated structured finance methodologies provide that Moody's gives equal value to triggers that are inserted by issuers and reference either senior unsecured debt ratings and/or CR Assessments. For example, if a counterparty has a CR Assessment of A2(cr) and a transfer trigger is set at a loss of the A3, the trigger contributes an uplift of two notches (resulting in a probability of becoming unhedged equivalent to a Aa3-rated entity, assuming no other uplift), regardless of whether the trigger in the transaction documentation references the counterparty's senior unsecured debt rating or CR Assessment.

In the event that a bank breaches a transaction trigger referencing its senior unsecured rating then, in keeping with the usual practice, Moody's will monitor how the bank responds. If the bank promptly takes the relevant remedial action -- such as transferring its obligations to another bank -- or some other suitable action that preserves the value of the trigger, the rating of the notes will generally not be negatively affected by the trigger breach (although any simultaneous downgrade of the bank's CR Assessment or deposit rating may affect the rating of the notes). By way of example, the value of a transaction trigger referencing a senior unsecured rating will be preserved if the transaction parties amend the documentation to replace it with a CR Assessment trigger (if it relates to a swap), or a bank deposit rating trigger (if it relates to a bank account) at the same rating level.

If, promptly following a senior unsecured trigger breach, the bank confirms its intention to take satisfactory action, and then takes that action within a reasonable period of time (typically no more than 90 days from the trigger breach), the breach will not, of itself, affect the rating of the notes.

KEY UPDATES TO THE ASSET-BACKED COMMERCIAL PAPER (ABCP) RATING METHODOLOGY

In line with this methodology update, Moody's will use the new CR Assessment or the senior unsecured debt rating as a reference point to, among other things, determine the exposure to liquidity and support providers, depending on the purpose of the ABCP conduit.

Part of the analysis when assigning a rating to ABCP conduits is to determine the appropriate reference point (CR Assessment or senior unsecured debt rating or equivalent) that accurately addresses the risk of the conduit. If the primary activity of the ABCP conduit is to directly fund on a revolving basis commercial clients of a bank, whose activities might be sustained in a resolution of the bank, Moody's generally considers the CR Assessment to be an appropriate reference point.

If the primary activity of the ABCP conduit is to fund securities or other assets transferred to it by a bank, which is generally the sponsor, Moody's will assess whether the motive and function of the programme are consistent with the bank's own funding activities and will generally consider a senior unsecured rating to be an appropriate reference point.

If a liquidity provider is not assigned a CR Assessment, Moody's will use the best proxy, which may be derived from the bank's senior unsecured debt rating.

UPDATES TO THE CREDIT CARD RATING METHODOLOGY

In line with its updated Credit Card rating methodology, Moody's will now generally use the sponsor's CR Assessment as a proxy for the likelihood of the closure of its credit card business. The CR Assessment most accurately reflects the scenario under which a successfully resolved bank will continue its core activities such as the origination of credit card receivables.

If the credit card business is not considered a core activity of the sponsor, or if there are other risks associated with the viability of this specific business in the event of bank failure, Moody's could apply a lower reference point to assess the wind-down of the portfolio.

If the sponsor is not eligible for a CR Assessment or one is not available, Moody's will use the best alternative proxy, which it may, for example, derive from its senior unsecured debt rating or, in some cases, its deposit rating. In limited circumstances a sponsor could qualify for a low-volatility credit estimate in the absence of a rating or CR Assessment.

In the interim period between the release of the updated methodology and the conclusion of the bank-related rating actions or the assignment of a CR Assessment, Moody's might be asked to rate new notes out of a credit card trust that it already rates. If its outstanding notes' ratings are on review for upgrade prompted by the methodology update or changes to Moody's assumptions, similarly-structured notes issued under new series will likely be assigned ratings on review for upgrade as well. The determination of Moody's "Aaa Credit Enhancement" would be approximated in the same manner.

UPDATES TO THE FUTURE RECEIVABLES RATING METHODOLOGY

In future flow transactions, where the originator is a bank, Moody's will generally use the bank's CR Assessment rather than the bank's local currency ratings to measure the probability that it will no longer be able to generate future receivables.

Credit risk related to the bank's local currency senior unsecured debt rating could still exist, depending on (1) the structure of the transaction, (2) the legal analysis of the true sale or transfer of security interest, and (3) Moody's analysis of the originator and its market.

UPDATES TO OTHER MOODY'S DOCUMENTS AND METHODOLOGIES

Today, Moody's also published an update to its Rating Symbols and Definitions guide, which now offers a definition of the CR Assessment under the section "Input to Ratings Services" (http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_79004) and a frequently asked questions document that sets out the relative positioning of the CR Assessment vis-à-vis other bank credit ratings (http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1002868).

Additionally, Moody's announced today updates to its covered bond rating methodology, Spanish multi-issuer covered bonds methodology and republished its credit substitution approach.

- Moody's Approach to Rating Covered Bonds: http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF396210

- Moody's Approach to Rating Spanish Multi-Issuer Covered Bonds: http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF396797

- Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts: http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_179655.

UPDATED STRUCTURED FINANCE CREDIT RATING METHODOLOGIES

- Moody's Approach to Rating Credit Card Receivables-Backed Securities (replacing the September 2014 report): http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF396330

- Moody's Approach to Assessing Set-off Risk for Australian Securitisation and Covered Bonds Transactions (replacing the July 2014 report): http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF398083

- Moody's Approach to Counterparty Instrument Ratings (replacing the March 2014 report): http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF397946

- Approach to Assessing Swap Counterparties in Structured Finance Cash Flow Transactions (replacing the November 2013 report): http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF397760

- Moody's Approach to Assessing Set-off Risk for EMEA Securitisation and Covered Bonds Transactions (replacing the October 2013 report): http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF398387

- Global Structured Finance Operational Risk Guidelines (replacing the June 2013 report): http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF397096

- Moody's Approach to Rating Future Receivables Transactions (replacing the May 2013 report): http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF397190

- The Temporary Use of Cash in Structured Finance Transactions: Eligible Investment and Bank Guidelines (replacing the March 2013 report): http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF398261

- Moody's Approach to Rating Asset-Backed Commercial Paper (replacing the May 2012 report): http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF398273

- Cash Commingling Risk in EMEA ABS and RMBS Transactions: Moody's Approach (replacing the November 2006 report): http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF398379

Moody's is implementing the updated credit rating methodologies as of the publication date, except for jurisdictions in which the rating agency must fulfil regulatory requirements prior to implementation.

NOTE TO JOURNALISTS ONLY: For more information, please call one of our global press information hotlines: London +44-20-7772-5456, New York +1-212-553-0376, Tokyo +813-5408-4110, Hong Kong +852-3758-1350, Sydney +61-2-9270-8141, Mexico City 001-888-779-5833, São Paulo 0800-891-2518, or Buenos Aires 0800-666-3506. You can also email us at mediarelations@moodys.com or visit our web site at www.moodys.com.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Jian Hu
MD - Structured Finance
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Neal Shah
MD - EMEA Structured Fin
Structured Finance Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's updates several structured finance rating methodologies in light of its new counterparty risk assessment for banks
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S 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 the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for 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