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
Sta per lasciare il sito locale per Italia e sarà reindirizzato al sito globale in lingua inglese. Desidera continuare?
Non mostrare più questo messaggio.
No
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 upgrades Croatia's ratings to Ba1, changes outlook to stable from positive

13 Nov 2020

Frankfurt am Main, November 13, 2020 -- Moody's Investors Service ("Moody's") has today upgraded the Government of Croatia's senior unsecured and long-term issuer ratings in foreign and local currency to Ba1 from Ba2 and changed the outlook to stable from positive.

Moody's decision to upgrade Croatia's ratings to Ba1 reflects the following key drivers:

• Enhanced institutional capacity and policymaking as the country enters a critical phase of euro area accession;

• Croatia's reduced exposure to foreign-currency debt risk.

The stable outlook reflects balanced credit strengths and challenges at the Ba1 rating level. Stronger-than-peers' institutions and low susceptibility to event risk support the credit profile. While Croatia's fiscal strength is weighed down by its relatively high debt load, the government's debt affordability is strong and its exposure to foreign-currency debt risk has declined. Finally, Croatia's much higher-than-peers' GDP per-capita is somewhat offset by the country's relatively small size and volatile economic growth.

Croatia's long-term local currency bond and deposit ceilings have been raised to A3 from Baa1. The long-term foreign currency bond ceiling was also raised to Baa1 from Baa3 and the long-term foreign currency deposit ceiling to Ba2 from Ba3. Finally, the short-term foreign currency bond ceiling has been raised to Prime-2 from Prime-3, while the short-term foreign currency deposit ceiling is unaffected by this rating action and remains at Not-Prime (NP).

RATINGS RATIONALE

RATIONALE FOR THE UPGRADE TO Ba1

FIRST DRIVER: ENHANCED INSTITUTIONAL CAPACITY AND POLICYMAKING AS THE COUNTRY ENTERS A CRITICAL PHASE OF EURO AREA ACCESSION

The first driver of the upgrade is based on Croatia's progress towards euro-area accession and the associated strengthening of institutional capacity and policy making. On 10 July 2020, the euro-area finance ministers, the President of the European Central Bank (ECB) and the finance ministers and central bank governors of Denmark and Croatia formally approved Croatia's entry into Exchange Rate Mechanism II (ERM II), which is one of the final steps prior to becoming a member of the euro area. The announcement amid the coronavirus disruption came against the background of Croatia's comprehensive reform programme.

As of July 2020, Croatia had fully completed the actions to which the country committed in six key areas: (1) banking supervision, (2) macroprudential framework, (3) anti-money laundering framework, (4) the collection, production and dissemination of statistics, (5) public sector governance, and (6) the reduction of the financial and administrative burden on the economy. In parallel, the European Central Bank (ECB) and the Croatian National Bank (CNB) have established a close cooperation.

In Moody's view, the successful completion of the reform programme speaks to the credibility of Croatia's ambition to join the euro area. Moody's believes that Croatia's policy effectiveness has strengthened over the recent years. The government and the central bank have provided a more predictable and stable framework for economic activity in a very uncertain environment. The policy response to mitigate the impact of the coronavirus pandemic has been timely and efficient, with the central bank providing targeted support at times of market volatility.

Moody's expects Croatia to continue to pursue sound economic and financial policies, as entering the euro area will require both sustainable economic convergence and readiness to participate in the banking union. On economic convergence, compliance with the convergence criteria is already advanced, as noted in the ECB's 2020 convergence report.

From a macroprudential and banking perspective, Moody's believes that the close cooperation between the ECB and the CNB and the inclusion of eight of the largest banks operating in Croatia under the ECB's supervision will further enhance the system's regulatory environment and promote the adoption of best practices. Finally, Croatia's legal framework will be strengthened as national legislation adapts to fully comply with Article 131 of the Treaty in the areas of central bank independence and legal integration into the Eurosystem.

SECOND DRIVER: CROATIA'S REDUCED EXPOSURE TO FOREIGN CURRENCY DEBT RISK

The second driver for the upgrade relates to Croatia's strengthened fiscal credit profile despite the negative impact of the coronavirus pandemic. Under Moody's Sovereign Ratings Methodology, a high share of foreign-currency denominated debt lowers fiscal strength considering the currency-depreciation risk that would trigger a sudden rise in interest costs and debt stock relative to GDP. In the case of Croatia, the tightly managed floating kuna-euro exchange rate already mitigates this risk. Entering ERM II has further decreased this risk, as it brings Croatia closer to its predominant currency of issuance, the euro. In 2019, 71.4% of Croatia's general government debt was denominated in euros, down from 73.8% in 2016. By contrast, the share of kuna-denominated bonds rose from 22% to 28.4%.

Moody's expects to fully eliminate the adjustment once Croatia effectively joins the euro area. Given the very uncertain environment and the need for Croatia to implement post-ERM II reforms, Moody's believes Croatia could join the euro area towards 2025.

Regarding the government's balance sheet, 2020 will mark a reversal in the declining debt trend against the backdrop of the coronavirus pandemic. Moody's expects Croatia's real GDP to contract by 8.6% this year, as both domestic and external demand are affected by the coronavirus pandemic. Accounting for 25% of GDP when considering direct and indirect effects, the Croatian tourism sector is strongly being affected by travel restrictions. As a result, Moody's expects the fiscal deficit to reach 7.5% of GDP in 2020. This, in turn, is expected to push the debt-to-GDP ratio to 88.5% in 2020 and debt-to-revenues to 192.5%.

However, Moody's expects the sharp deterioration in the debt metrics to be temporary and forecasts a gradual decline starting in 2021, when debt-to-GDP is expected to reach 86.7%, followed by 85.9% in 2022. The gradual reduction in public debt will be supported by a gradual economic recovery and a prudent fiscal stance as the government targets convergence towards the Maastricht criteria. Furthermore, the higher debt load will be partly offset by strong and improving affordability metrics, as Moody's forecasts a decline in interest payments-to-GDP from 2.2% in 2019 to 2.0% in 2021. Similarly, interest payments-to-revenues are expected to fall from 4.7% in 2019 to 4.2% in 2021.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects balanced credit strengths and challenges at the Ba1 rating level. Stronger- than-peers' institutions and low susceptibility to event risk support the credit profile. Croatia's fiscal strength combines a higher debt load compared to peers, while debt affordability is strong and foreign currency debt risk is declining with ERM II entrance. In terms of economic strength, Croatia's much higher-than-peers' wealth per-capita is somewhat offset by the country's relatively smaller size, slower growing and more volatile economy.

The stable outlook also reflects Moody's balanced view of the country's prospects going forward. Croatia's improved economic fundamentals and enhanced institutional capacity will provide resilience at the Ba1 rating level. At the same time, the stable outlook captures heightened risks for permanent scars with respect to Croatia's economic and fiscal strength against the backdrop of the coronavirus' new infection wave, with potentially a negative impact on both domestic and external demand.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Moody's takes account of the impact of environmental (E), social (S) and governance (G) factors when assessing sovereign issuers' economic, institutional and fiscal strength and their susceptibility to event risk. In the case of Croatia, the materiality of ESG to the credit profile is as follows.

Environmental considerations are not material to Croatia's credit profile although the March 2020 earthquake in Zagreb reflects some exposure to physical risk.

Social risks affect Croatia's credit profile, given spending pressure on pensions and health-care due to an ageing population and net migration outflows. Similarly, prime-age participation and employment rates remain clearly below the EU average. We regard the coronavirus pandemic as a social risk under our ESG framework, given the substantial implications for public health and safety, and that the pandemic will have a transitory adverse economic and fiscal impact.

Governance considerations form an integral part of our credit analysis for Croatia and are material to the credit profile. Croatia's fiscal and monetary policy effectiveness have remained strong over the past years, supporting the country's entry into ERM II.

GDP per capita (PPP basis, US$): 29,828 (2019 Actual) (also known as Per Capita Income)

Real GDP growth (% change): 2.9% (2019 Actual) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 1.3% (2019 Actual)

Gen. Gov. Financial Balance/GDP: 0.4% (2019 Actual) (also known as Fiscal Balance)

Current Account Balance/GDP: 2.6% (2019 Actual) (also known as External Balance)

External debt/GDP: 75.3% (2019 Actual)

Economic resiliency: baa1

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

On 10 November 2020, a rating committee was called to discuss the rating of Croatia, Government of. The main points raised during the discussion were: The issuer's institutions and governance strength, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has materially increased. Other views raised included: The issuer's economic fundamentals, including its economic strength, have not materially changed.

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

Upward pressure on Croatia's outlook and, potentially, ratings, would arise from a steady economic recovery and improving fiscal metrics following the coronavirus shock. Similarly, a clear and sustained convergence path towards the euro area would also be credit positive.

Conversely, a marked and permanent deterioration in Croatia's long-term economic prospects affecting the government's balance sheet would exert downward pressure on Croatia's rating. In addition, any signs of a weakening in the institutional framework would also be credit-negative and could lead to a negative outlook and ultimately to a downgrade of the rating.

The principal methodology used in these ratings was Sovereign Ratings Methodology published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1158631. Alternatively, 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.

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.

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.

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.

Olivier Chemla
Vice President - Senior Analyst
Sovereign Risk Group
Moody's Deutschland GmbH
An der Welle 5
Frankfurt am Main 60322
Germany
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Yves Lemay
MD-Sovereign/Sub Sovereign
Sovereign Risk Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
Moody's Deutschland GmbH
An der Welle 5
Frankfurt am Main 60322
Germany
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

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.