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 upgrades Fluidra to Ba2; stable outlook

10 Jun 2021

Milan, June 10, 2021 -- Moody's Investors Service ("Moody's") has today upgraded to Ba2 from Ba3 the corporate family rating (CFR) and to Ba2-PD from Ba3-PD the probability of default rating (PDR) of Fluidra S.A. ("Fluidra" or the "company"), a Spanish-based multinational group serving the residential and commercial pool and wellness sector. Concurrently, Moody's has also upgraded to Ba2 from Ba3 the guaranteed senior secured ratings on the company's €700 million equivalent term loan and B1 (TLB) and €130 million guaranteed 1st lien senior secured revolving credit facility (RCF). The outlook is stable.

"The upgrade to Ba2 reflects the significant improvement in operating performance in 2020 driven by strong consumer demand for pool products and the expectation that this positive momentum will continue in 2021, which will support a further improvement in Fluidra's credit metrics," says Giuliana Cirrincione, Moody's lead analyst for Fluidra.

"The upgrade also reflects the company's leading position in the global pool equipment market and its track record of prudent financial policies and solid free cash flow generation," adds Mrs. Cirrincione.

The list of affected ratings can be found at the end of this press release.

RATINGS RATIONALE

The rating upgrade reflects Moody's expectation that Fluidra's sustained earnings growth will continue over the next 12-18 months, resulting in an improvement in credit metrics. Moody's expects the company's financial leverage -- measured as Moody's adjusted gross debt to EBITDA -- to decline towards 2.3x over the next 12-18 months (from 3.0x in 2020), and Moody's adjusted EBITDA margins to rise to above 20% going forward, well within the thresholds for the Ba2 rating.

Fluidra benefitted from the expansion of the residential pool industry during the pandemic-induced economic recession in 2020, as travel restrictions, stay-at-home prescriptions and remote working boosted demand for home-based recreation, resulting in pool upgrades and growth in the installed base.

As a result, Fluidra reported 9% sales growth in 2020 while profitability, in terms of Moody's adjusted EBITDA margin, improved significantly to 19.6% from 13.8% the year before. The profitability improvement was driven not only by the boost in volumes following the pandemic, but also by price increases, the shift to higher-margin product categories and the gradual achievement of synergies from its merger with Zodiac.

Moody's expects topline growth to accelerate further in 2021, by around 20%, including also the contribution from the recently completed acquisition of US-based pool component manufacturer CMP. This expectation reflects that the continued strong demand for residential pool upgrades and new construction, mainly in the US and Europe, is translating into an increase in the backlog, which already covers most of Fluidra's planned production for the year. In Q1 2021, the company reported 61% revenue growth and revised its guidance for the year to annual sales growth of 25%-30%, from 15% previously.

According to the rating agency's forecasts, revenue trends will normalize starting from 2022, with growth rates back in the mid-single digits, mainly driven by the less cyclical aftermarket. Aftermarket growth will also benefit from the currently strong new pool construction, as a progressively larger installed base boosts aftermarket sales (currently 65% of the company's total revenue), which in turn provide a degree of protection from potential sudden shifts in consumer demand at times of economic downturns. However, consumer spending for out-of-home leisure activities will regain strong momentum once mobility restrictions associated with the coronavirus pandemic are fully lifted, which in Moody's view represents a downside to Fluidra's growth prospects from 2022 onwards.

Free cash flow generation will remain good at around €80 million - €100 million each year in 2021 and 2022 respectively, albeit at a lower level compared to 2020 (€190 million) due to higher dividends and capex spending. As a result, leverage reduction will slow going forward, as Moody's expects Fluidra's excess cash will largely be used to make shareholder distributions and pursue select medium-sized M&A opportunities, as long as the company's net debt to EBITDA ratio remains in line with its long term target of 2.0x. Despite some M&A risk and anticipated larger shareholder distributions (which should peak to around €170 million in 2021, including share buybacks for €87 million), Moody's expects that Fluidra will maintain a balanced financial policy and a prudent liquidity management.

Fluidra's Ba2 rating also factors in the company's material growth in scale since initial rating assignment in 2018, its global footprint with a large multi-brand portfolio and geographically diversified sales; healthy profitability and cash flow generation, supported by synergies from the recent merger with Zodiac Pool Solutions LCC, as well as by consistent pricing power; balanced financial policy, including a net debt to EBITDA target (as reported by the company) of 2.0x, which is broadly equivalent to a Moody's adjusted gross leverage of 3.0x; and good liquidity.

The rating remains constrained by Fluidra's relatively narrow business focus as a pool equipment producer with a concentration on the residential segment; its exposure to discretionary consumer spending, although the large share of more resilient aftermarket sales provides a degree of protection from the cyclicality of new pool construction; and risks related to shareholder distributions and medium-sized acquisitions, which constrain cash generation and a further reduction in financial leverage.

LIQUIDITY

Fluidra's liquidity is good, supported by (1) a cash balance of €90 million as of end of March 2021 (after the significant cash absorption in the first quarter of the year due to the typical working capital seasonality), (2) the expectation of a solid free cash flow generation of minimum €80 million - €100 million per annum, and (3) access to a €130 million RCF and a $230 million ABL. The RCF and ABL are intended for financing working capital, with peak utilisation in the first half of the year.

These liquidity sources will comfortably cover Fluidra's cash needs, including the large intra-year working capital swings of up to €200 million; capital spending of around €85 million, (including operating lease adjustment); assumed annual acquisition spending of up to €35 million (compared to €250 million in 2021 which includes the larger-than-average acquisition of CMP); and dividend payments and share buybacks averaging approximately €150 million annually in 2021-22. Fluidra does not face any significant debt maturities until July 2025, when its TLB is due, assuming no utilisation of the RCF and the ABL, which are due in 2024 and 2023, respectively.

STRUCTURAL CONSIDERATIONS

The Ba2 ratings assigned to the senior secured TLB and the RCF are in line with the CFR, reflecting the fact that these facilities rank pari passu among themselves and constitute most of Fluidra's debt. The TLB and the RCF benefit from a first-priority pledge over substantially all of the group's tangible and intangible assets other than receivables, inventories and cash, over which the ABL has a first-priority pledge and the TLB and the RCF have instead a second-priority pledge.

However, the ABL does not cause any structural subordination to the TLB and the RCF because the ABL facility represents a relatively small portion of the group's capital structure and the pledged assets over which the ABL has a first-priority pledge have a limited size compared with that of the company's entire asset pool.

The TLB, the RCF and the ABL are all guaranteed by Fluidra and each of its material restricted subsidiaries. The RCF is subject to a springing financial covenant based on the first-lien net leverage ratio, tested only if the RCF is more than 40% drawn, against which Moody's expects the company to retain ample capacity (test level is 5.65x).

Moody's has assumed a 50% recovery rate in absence of any financial maintenance covenant in the TLB, which implies a probability of default rating of Ba2-PD.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's expectation that Fluidra's credit metrics will remain strong over the next 12-18 months, despite a progressive normalization of market demand post-pandemic, on the back of continued efficiency improvements, pricing power and favorable product mix.

The stable outlook also assumes that Fluidra will maintain a balanced financial policy, whereby the already achieved net leverage target of 2.0x will be prioritized over dividends, share buybacks and acquisition spending.

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

Given that the company is already operating at the lower end of its leverage target of 2.0x, further upward pressure on the rating is more limited. However, overtime, upward pressure on the rating could materialise if earnings growth and operating efficiency improvements continue combined with increased scale and business diversification, leading to a Moody's adjusted gross debt to EBITDA ratio below 2.0x on a sustained basis. A rating upgrade would also require that a good liquidity is maintained.

Fluidra's ratings could be downgraded if operating performance weakens as a result of a sustained deterioration in demand or market position, such that Moody's adjusted gross debt to EBITDA rises above 3x on a sustained basis. Negative pressure could also materialise if the company fails to maintain a good liquidity profile as a result of an aggressive M&A strategy or significantly higher than-expected shareholder distributions.

LIST OF AFFECTED RATINGS

..Issuer: Fluidra S.A.

Upgrades:

.... Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD

.... LT Corporate Family Rating, Upgraded to Ba2 from Ba3

....BACKED Senior Secured Bank Credit Facilities, Upgraded to Ba2 from Ba3

Outlook Action:

....Outlook, Remains Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Consumer Durables Industry published in April 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1060509. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

COMPANY PROFILE

Headquartered in Sant Cugat del Vallès, Spain, Fluidra is the world's largest producer of pool equipment and wellness solutions with an 18% share of the global pool equipment market. The company operates across 45 countries and has more than 5,500 employees. In 2020, Fluidra reported sales of €1.5 billion and EBITDA of €317 million. The company's largest shareholders are Fluidra's founding families (28.1%) and Rhône Capital (16.57% stake), with the remaining shares in free float.

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 http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1263068.

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

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Giuliana Cirrincione
Analyst
Corporate Finance Group
Moody's Italia S.r.l
Corso di Porta Romana 68
Milan 20122
Italy
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Ivan Palacios
Associate Managing Director
Corporate Finance Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
Moody's Italia S.r.l
Corso di Porta Romana 68
Milan 20122
Italy
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.

Moodys.com