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APCO Holdings, LLC -- Moody’s affirms APCO Holdings’ ratings; outlook revised to positive

·30 min read

<!DOCTYPE html> <html lang="" xml:lang=""> <head> <title>/nwsys/www/images/PR_1000003985</title> <meta http-equiv="Content-Type" content="text/html; charset=UTF-8"/> <meta name="generator" content="pdftohtml 0.36"/> <meta name="date" content="2020-12-18T16:56:10+00:00"/> <style type="text/css"> <!-- .xflip { -moz-transform: scaleX(-1); -webkit-transform: scaleX(-1); -o-transform: scaleX(-1); transform: scaleX(-1); filter: fliph; } .yflip { -moz-transform: scaleY(-1); -webkit-transform: scaleY(-1); -o-transform: scaleY(-1); transform: scaleY(-1); filter: flipv; } .xyflip { -moz-transform: scaleX(-1) scaleY(-1); -webkit-transform: scaleX(-1) scaleY(-1); -o-transform: scaleX(-1) scaleY(-1); transform: scaleX(-1) scaleY(-1); filter: fliph + flipv; } --> </style> </head> <body bgcolor="#A0A0A0" vlink="blue" link="blue"> <!-- Page 1 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft00{font-size:18px;font-family:Times;color:#000000;} .ft01{font-size:18px;font-family:Times;color:#1257c7;} .ft02{font-size:14px;font-family:Times;color:#666666;} .ft03{font-size:13px;font-family:Times;color:#0d0c0c;} .ft04{font-size:13px;line-height:31px;font-family:Times;color:#0d0c0c;} .ft05{font-size:13px;line-height:30px;font-family:Times;color:#0d0c0c;} --> </style> <div id="page1-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PR_1000003985001.png" alt="background image"/> <p style="position:absolute;top:163px;left:108px;white-space:nowrap" class="ft00"><b>Rating Action:&#160;</b></p> <p style="position:absolute;top:163px;left:252px;white-space:nowrap" class="ft01"><b>Moody’s affirms APCO Holdings’ ratings; outlook revised</b></p> <p style="position:absolute;top:187px;left:108px;white-space:nowrap" class="ft01"><b>to positive</b></p> <p style="position:absolute;top:234px;left:108px;white-space:nowrap" class="ft02"><b>18 December 2020</b></p> <p style="position:absolute;top:267px;left:108px;white-space:nowrap" class="ft03">New York, December 18, 2020 - Moody’s Investors Service has affirmed the Caa1 corporate</p> <p style="position:absolute;top:287px;left:108px;white-space:nowrap" class="ft03">family rating (CFR) and Caa1-PD probability of default rating of APCO Holdings, LLC (APCO),</p> <p style="position:absolute;top:306px;left:108px;white-space:nowrap" class="ft03">an administrator of vehicle service contracts. In the same action, Moody's also affirmed the Caa1</p> <p style="position:absolute;top:326px;left:108px;white-space:nowrap" class="ft03">ratings of APCO's senior secured credit facilities, including a $220 million term loan and $20 million</p> <p style="position:absolute;top:345px;left:108px;white-space:nowrap" class="ft03">revolving credit facility. The outlook for APCO was changed to positive from negative reflecting the</p> <p style="position:absolute;top:365px;left:108px;white-space:nowrap" class="ft04">company’s improvement in operating performance and liquidity.<br/>RATINGS RATIONALE<br/>Moody’s said the positive outlook reflects our expectation that APCO’s prospective profitability,</p> <p style="position:absolute;top:446px;left:108px;white-space:nowrap" class="ft03">liquidity and financial leverage will improve. While the coronavirus pandemic was expected to</p> <p style="position:absolute;top:466px;left:108px;white-space:nowrap" class="ft03">negatively impact APCO’s revenue and earnings, particularly during the second quarter, the</p> <p style="position:absolute;top:485px;left:108px;white-space:nowrap" class="ft03">company generated revenue and earnings growth for the first nine months of the year as the</p> <p style="position:absolute;top:505px;left:108px;white-space:nowrap" class="ft03">economy gradually recovered. APCO was able to adjust its variable expenses in response to</p> <p style="position:absolute;top:524px;left:108px;white-space:nowrap" class="ft03">expected lower revenues as well as implement other cost savings. The company also benefited</p> <p style="position:absolute;top:544px;left:108px;white-space:nowrap" class="ft03">from lower claims frequency on its vehicle services contracts given reduced miles driven during</p> <p style="position:absolute;top:563px;left:108px;white-space:nowrap" class="ft03">the pandemic. As a result of these actions, APCO’s liquidity has improved and resulted in a full</p> <p style="position:absolute;top:583px;left:108px;white-space:nowrap" class="ft05">repayment of its revolver borrowings in the third quarter of 2020.<br/>The affirmation of APCO's ratings reflects its leading position as a marketer and administrator of</p> <p style="position:absolute;top:633px;left:108px;white-space:nowrap" class="ft03">vehicle service contracts, its fee-oriented operating model with no material underwriting risk and</p> <p style="position:absolute;top:652px;left:108px;white-space:nowrap" class="ft03">its historically good free-cash-flow metrics. Offsetting these strengths are the company's limited</p> <p style="position:absolute;top:672px;left:108px;white-space:nowrap" class="ft03">size and its largely monoline business profile, which is strongly tied to US auto sales and economic</p> <p style="position:absolute;top:691px;left:108px;white-space:nowrap" class="ft03">cycles. The vehicle service contract industry has some large, well-established competitors, including</p> <p style="position:absolute;top:711px;left:108px;white-space:nowrap" class="ft03">third-party administrators, insurers and original equipment manufacturers. Other risks include the</p> <p style="position:absolute;top:730px;left:108px;white-space:nowrap" class="ft05">company's aggressive financial leverage and weak interest coverage.<br/>FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS<br/>Factors that could lead to an upgrade of APCO's ratings include: (i) track record of reducing debt,</p> <p style="position:absolute;top:810px;left:108px;white-space:nowrap" class="ft03">(ii) (EBITDA - capex) coverage of interest exceeding 1.5x, and (iii) free-cash-flow-to-debt ratio</p> <p style="position:absolute;top:830px;left:108px;white-space:nowrap" class="ft05">exceeding 3%.<br/>Factors that could return the outlook to stable include: (i) delay in reducing financial leverage, (ii)</p> <p style="position:absolute;top:880px;left:108px;white-space:nowrap" class="ft03">EBITDA - capex coverage of interest consistently below 1.5x, and (iii) free-cash-flow-to-debt ratio</p> <p style="position:absolute;top:899px;left:108px;white-space:nowrap" class="ft05">below 3%.<br/>Moody’s has affirmed the following ratings:<br/>Corporate family rating at Caa1;<br/>Probability of default rating at Caa1-PD;<br/>$20 million first-lien senior secured revolving credit facility maturing in 2023 to Caa1(LGD3);<br/>$220 million first-lien senior secured term loan maturing in 2025 to Caa1(LGD3).</p> </div> <!-- Page 2 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft06{font-size:13px;font-family:Times;color:#1b62b7;} --> </style> <div id="page2-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PR_1000003985002.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft05">Outlook: revised to positive from negative<br/>The principal methodology used in these ratings was Insurance Brokers and Service</p> <p style="position:absolute;top:163px;left:108px;white-space:nowrap" class="ft03">Companies published in June 2018 and available at&#160;</p> <p style="position:absolute;top:163px;left:473px;white-space:nowrap" class="ft06">https://www.moodys.com/</p> <p style="position:absolute;top:183px;left:108px;white-space:nowrap" class="ft06">researchdocumentcontentpage.aspx?docid=PBC_1121967</p> <p style="position:absolute;top:183px;left:520px;white-space:nowrap" class="ft03">&#160;. Please see the Rating Methodologies</p> <p style="position:absolute;top:202px;left:108px;white-space:nowrap" class="ft05">page on www.moodys.com for a copy of this methodology.<br/>Based in Georgia, APCO is a leading marketer and administrator of vehicle service contracts</p> <p style="position:absolute;top:252px;left:108px;white-space:nowrap" class="ft03">and complementary products sold by auto dealers throughout the US and Canada. The company</p> <p style="position:absolute;top:272px;left:108px;white-space:nowrap" class="ft03">operates two distinct brands, EasyCare, which focuses on franchise dealers, and GWC Warranty,</p> <p style="position:absolute;top:291px;left:108px;white-space:nowrap" class="ft03">which focuses on independent dealers selling primarily used cars. APCO designs the VSCs,</p> <p style="position:absolute;top:311px;left:108px;white-space:nowrap" class="ft03">services customer claims on behalf of a number of insurers, and shares in profits when underwriting</p> <p style="position:absolute;top:330px;left:108px;white-space:nowrap" class="ft03">results are favorable. However, the company does not bear material underwriting risk on the VSCs.</p> <p style="position:absolute;top:350px;left:108px;white-space:nowrap" class="ft03">In January 2016, the Ontario Teachers’ Pension Plan acquired a controlling stake in the company</p> <p style="position:absolute;top:369px;left:108px;white-space:nowrap" class="ft04">through a leveraged buyout.<br/>REGULATORY DISCLOSURES<br/>For further specification of Moody’s key rating assumptions and sensitivity analysis, see</p> <p style="position:absolute;top:451px;left:108px;white-space:nowrap" class="ft03">the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure</p> <p style="position:absolute;top:470px;left:108px;white-space:nowrap" class="ft03">form. Moody’s Rating Symbols and Definitions can be found at:&#160;</p> <p style="position:absolute;top:470px;left:551px;white-space:nowrap" class="ft06">https://www.moodys.com/</p> <p style="position:absolute;top:490px;left:108px;white-space:nowrap" class="ft06">researchdocumentcontentpage.aspx?docid=PBC_79004</p> <p style="position:absolute;top:490px;left:503px;white-space:nowrap" class="ft03">.</p> <p style="position:absolute;top:520px;left:108px;white-space:nowrap" class="ft03">For ratings issued on a program, series, category/class of debt or security this announcement</p> <p style="position:absolute;top:540px;left:108px;white-space:nowrap" class="ft03">provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or</p> <p style="position:absolute;top:559px;left:108px;white-space:nowrap" class="ft03">note of the same series, category/class of debt, security or pursuant to a program for which the</p> <p style="position:absolute;top:579px;left:108px;white-space:nowrap" class="ft03">ratings are derived exclusively from existing ratings in accordance with Moody's rating practices.</p> <p style="position:absolute;top:598px;left:108px;white-space:nowrap" class="ft03">For ratings issued on a support provider, this announcement provides certain regulatory disclosures</p> <p style="position:absolute;top:618px;left:108px;white-space:nowrap" class="ft03">in relation to the credit rating action on the support provider and in relation to each particular credit</p> <p style="position:absolute;top:637px;left:108px;white-space:nowrap" class="ft03">rating action for securities that derive their credit ratings from the support provider's credit rating.</p> <p style="position:absolute;top:657px;left:108px;white-space:nowrap" class="ft03">For provisional ratings, this announcement provides certain regulatory disclosures in relation to the</p> <p style="position:absolute;top:676px;left:108px;white-space:nowrap" class="ft03">provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent</p> <p style="position:absolute;top:696px;left:108px;white-space:nowrap" class="ft03">to the final issuance of the debt, in each case where the transaction structure and terms have not</p> <p style="position:absolute;top:715px;left:108px;white-space:nowrap" class="ft03">changed prior to the assignment of the definitive rating in a manner that would have affected the</p> <p style="position:absolute;top:735px;left:108px;white-space:nowrap" class="ft03">rating. For further information please see the ratings tab on the issuer/entity page for the respective</p> <p style="position:absolute;top:754px;left:108px;white-space:nowrap" class="ft05">issuer on www.moodys.com.<br/>For any affected securities or rated entities receiving direct credit support from the primary entity(ies)</p> <p style="position:absolute;top:804px;left:108px;white-space:nowrap" class="ft03">of this credit rating action, and whose ratings may change as a result of this credit rating action, the</p> <p style="position:absolute;top:823px;left:108px;white-space:nowrap" class="ft03">associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach</p> <p style="position:absolute;top:843px;left:108px;white-space:nowrap" class="ft03">exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated</p> <p style="position:absolute;top:862px;left:108px;white-space:nowrap" class="ft05">entity, Disclosure from rated entity.<br/>The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no</p> <p style="position:absolute;top:912px;left:108px;white-space:nowrap" class="ft05">amendment resulting from that disclosure.<br/>These ratings are solicited. Please refer to Moody’s Policy for Designating and Assigning Unsolicited</p> <p style="position:absolute;top:962px;left:108px;white-space:nowrap" class="ft05">Credit Ratings available on its website www.moodys.com.<br/>Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the</p> <p style="position:absolute;top:1012px;left:108px;white-space:nowrap" class="ft03">related rating outlook or rating review.</p> </div> <!-- Page 3 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft07{font-size:13px;line-height:23px;font-family:Times;color:#0d0c0c;} --> </style> <div id="page3-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PR_1000003985003.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft03">Moody’s general principles for assessing environmental, social and governance (ESG) risks in our</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft03">credit analysis can be found at&#160;</p> <p style="position:absolute;top:133px;left:325px;white-space:nowrap" class="ft06">https://www.moodys.com/researchdocumentcontentpage.aspx?</p> <p style="position:absolute;top:153px;left:108px;white-space:nowrap" class="ft06">docid=PBC_1243406</p> <p style="position:absolute;top:153px;left:257px;white-space:nowrap" class="ft03">.</p> <p style="position:absolute;top:183px;left:108px;white-space:nowrap" class="ft03">The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s</p> <p style="position:absolute;top:202px;left:108px;white-space:nowrap" class="ft03">affiliates outside the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt</p> <p style="position:absolute;top:222px;left:108px;white-space:nowrap" class="ft03">am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No</p> <p style="position:absolute;top:241px;left:108px;white-space:nowrap" class="ft03">1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the</p> <p style="position:absolute;top:261px;left:108px;white-space:nowrap" class="ft05">Moody’s office that issued the credit rating is available on www.moodys.com.<br/>Please see www.moodys.com for any updates on changes to the lead rating analyst and to the</p> <p style="position:absolute;top:311px;left:108px;white-space:nowrap" class="ft05">Moody's legal entity that has issued the rating.<br/>Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory</p> <p style="position:absolute;top:360px;left:108px;white-space:nowrap" class="ft05">disclosures for each credit rating.<br/>Siddhartha Ghosh</p> <p style="position:absolute;top:410px;left:108px;white-space:nowrap" class="ft03">VP-Senior Analyst</p> <p style="position:absolute;top:430px;left:108px;white-space:nowrap" class="ft03">Financial Institutions Group</p> <p style="position:absolute;top:449px;left:108px;white-space:nowrap" class="ft03">Moody's Investors Service, Inc.</p> <p style="position:absolute;top:469px;left:108px;white-space:nowrap" class="ft03">250 Greenwich Street</p> <p style="position:absolute;top:488px;left:108px;white-space:nowrap" class="ft03">New York, NY 10007</p> <p style="position:absolute;top:508px;left:108px;white-space:nowrap" class="ft03">U.S.A.</p> <p style="position:absolute;top:527px;left:108px;white-space:nowrap" class="ft03">JOURNALISTS: 1 <PhoneNo>212 553 0376</PhoneNo></p> <p style="position:absolute;top:547px;left:108px;white-space:nowrap" class="ft05">Client Service: 1 <PhoneNo>212 553 1653</PhoneNo><br/>Sarah Hibler</p> <p style="position:absolute;top:597px;left:108px;white-space:nowrap" class="ft03">Associate Managing Director</p> <p style="position:absolute;top:616px;left:108px;white-space:nowrap" class="ft03">Financial Institutions Group</p> <p style="position:absolute;top:636px;left:108px;white-space:nowrap" class="ft03">JOURNALISTS: 1 <PhoneNo>212 553 0376</PhoneNo></p> <p style="position:absolute;top:655px;left:108px;white-space:nowrap" class="ft05">Client Service: 1 <PhoneNo>212 553 1653</PhoneNo><br/>Releasing Office:</p> <p style="position:absolute;top:705px;left:108px;white-space:nowrap" class="ft03">Moody's Investors Service, Inc.</p> <p style="position:absolute;top:724px;left:108px;white-space:nowrap" class="ft03">250 Greenwich Street</p> <p style="position:absolute;top:744px;left:108px;white-space:nowrap" class="ft03">New York, NY 10007</p> <p style="position:absolute;top:763px;left:108px;white-space:nowrap" class="ft03">U.S.A.</p> <p style="position:absolute;top:783px;left:108px;white-space:nowrap" class="ft03">JOURNALISTS: 1 <PhoneNo>212 553 0376</PhoneNo></p> <p style="position:absolute;top:802px;left:108px;white-space:nowrap" class="ft03">Client Service: 1 <PhoneNo>212 553 1653</PhoneNo></p> <p style="position:absolute;top:899px;left:108px;white-space:nowrap" class="ft03">© 2020 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their</p> <p style="position:absolute;top:918px;left:108px;white-space:nowrap" class="ft07">licensors and affiliates (collectively, “MOODY’S”). All rights reserved.<br/>CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT</p> <p style="position:absolute;top:961px;left:108px;white-space:nowrap" class="ft03">RATINGS AFFILIATES ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE</p> <p style="position:absolute;top:980px;left:108px;white-space:nowrap" class="ft03">CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES,</p> <p style="position:absolute;top:1000px;left:108px;white-space:nowrap" class="ft03">AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S</p> <p style="position:absolute;top:1019px;left:108px;white-space:nowrap" class="ft03">(COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S</p> <p style="position:absolute;top:1039px;left:108px;white-space:nowrap" class="ft03">INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT</p> </div> <!-- Page 4 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page4-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PR_1000003985004.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft03">MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft03">ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S</p> <p style="position:absolute;top:153px;left:108px;white-space:nowrap" class="ft03">RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES</p> <p style="position:absolute;top:172px;left:108px;white-space:nowrap" class="ft03">OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S INVESTORS</p> <p style="position:absolute;top:192px;left:108px;white-space:nowrap" class="ft03">SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK,</p> <p style="position:absolute;top:211px;left:108px;white-space:nowrap" class="ft03">INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE</p> <p style="position:absolute;top:231px;left:108px;white-space:nowrap" class="ft03">VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER</p> <p style="position:absolute;top:250px;left:108px;white-space:nowrap" class="ft03">OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT</p> <p style="position:absolute;top:270px;left:108px;white-space:nowrap" class="ft03">OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE</p> <p style="position:absolute;top:289px;left:108px;white-space:nowrap" class="ft03">MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY</p> <p style="position:absolute;top:309px;left:108px;white-space:nowrap" class="ft03">PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT</p> <p style="position:absolute;top:328px;left:108px;white-space:nowrap" class="ft03">RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE</p> <p style="position:absolute;top:348px;left:108px;white-space:nowrap" class="ft03">OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS,</p> <p style="position:absolute;top:367px;left:108px;white-space:nowrap" class="ft03">ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE</p> <p style="position:absolute;top:387px;left:108px;white-space:nowrap" class="ft03">RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S</p> <p style="position:absolute;top:406px;left:108px;white-space:nowrap" class="ft03">CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT</p> <p style="position:absolute;top:426px;left:108px;white-space:nowrap" class="ft03">COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR.</p> <p style="position:absolute;top:445px;left:108px;white-space:nowrap" class="ft03">MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND</p> <p style="position:absolute;top:465px;left:108px;white-space:nowrap" class="ft03">PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH</p> <p style="position:absolute;top:484px;left:108px;white-space:nowrap" class="ft03">INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH</p> <p style="position:absolute;top:504px;left:108px;white-space:nowrap" class="ft07">SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.<br/>MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS</p> <p style="position:absolute;top:546px;left:108px;white-space:nowrap" class="ft03">ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS</p> <p style="position:absolute;top:566px;left:108px;white-space:nowrap" class="ft03">AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS,</p> <p style="position:absolute;top:585px;left:108px;white-space:nowrap" class="ft03">ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT</p> <p style="position:absolute;top:605px;left:108px;white-space:nowrap" class="ft03">DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER</p> <p style="position:absolute;top:624px;left:108px;white-space:nowrap" class="ft03">PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED</p> <p style="position:absolute;top:644px;left:108px;white-space:nowrap" class="ft03">BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH</p> <p style="position:absolute;top:663px;left:108px;white-space:nowrap" class="ft03">INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER</p> <p style="position:absolute;top:683px;left:108px;white-space:nowrap" class="ft03">TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED</p> <p style="position:absolute;top:702px;left:108px;white-space:nowrap" class="ft03">FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM</p> <p style="position:absolute;top:722px;left:108px;white-space:nowrap" class="ft03">OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S</p> <p style="position:absolute;top:741px;left:108px;white-space:nowrap" class="ft07">PRIOR WRITTEN CONSENT.<br/>MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE</p> <p style="position:absolute;top:784px;left:108px;white-space:nowrap" class="ft03">NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED</p> <p style="position:absolute;top:803px;left:108px;white-space:nowrap" class="ft03">FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT</p> <p style="position:absolute;top:823px;left:108px;white-space:nowrap" class="ft07">IN THEM BEING CONSIDERED A BENCHMARK.<br/>All information contained herein is obtained by MOODY’S from sources believed by it to be</p> <p style="position:absolute;top:865px;left:108px;white-space:nowrap" class="ft03">accurate and reliable. Because of the possibility of human or mechanical error as well as other</p> <p style="position:absolute;top:885px;left:108px;white-space:nowrap" class="ft03">factors, however, all information contained herein is provided “AS IS” without warranty of any kind.</p> <p style="position:absolute;top:904px;left:108px;white-space:nowrap" class="ft03">MOODY'S adopts all necessary measures so that the information it uses in assigning a credit</p> <p style="position:absolute;top:924px;left:108px;white-space:nowrap" class="ft03">rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when</p> <p style="position:absolute;top:943px;left:108px;white-space:nowrap" class="ft03">appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot</p> <p style="position:absolute;top:963px;left:108px;white-space:nowrap" class="ft03">in every instance independently verify or validate information received in the rating process or in</p> <p style="position:absolute;top:982px;left:108px;white-space:nowrap" class="ft07">preparing its Publications.<br/>To the extent permitted by law, MOODY’S and its directors, officers, employees, agents,</p> <p style="position:absolute;top:1025px;left:108px;white-space:nowrap" class="ft03">representatives, licensors and suppliers disclaim liability to any person or entity for any indirect,</p> <p style="position:absolute;top:1044px;left:108px;white-space:nowrap" class="ft03">special, consequential, or incidental losses or damages whatsoever arising from or in connection</p> </div> <!-- Page 5 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page5-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PR_1000003985005.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft03">with the information contained herein or the use of or inability to use any such information, even if</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft03">MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers</p> <p style="position:absolute;top:153px;left:108px;white-space:nowrap" class="ft03">is advised in advance of the possibility of such losses or damages, including but not limited to:</p> <p style="position:absolute;top:172px;left:108px;white-space:nowrap" class="ft03">(a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant</p> <p style="position:absolute;top:192px;left:108px;white-space:nowrap" class="ft07">financial instrument is not the subject of a particular credit rating assigned by MOODY’S.<br/>To the extent permitted by law, MOODY’S and its directors, officers, employees, agents,</p> <p style="position:absolute;top:234px;left:108px;white-space:nowrap" class="ft03">representatives, licensors and suppliers disclaim liability for any direct or compensatory losses</p> <p style="position:absolute;top:254px;left:108px;white-space:nowrap" class="ft03">or damages caused to any person or entity, including but not limited to by any negligence (but</p> <p style="position:absolute;top:273px;left:108px;white-space:nowrap" class="ft03">excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt,</p> <p style="position:absolute;top:293px;left:108px;white-space:nowrap" class="ft03">by law cannot be excluded) on the part of, or any contingency within or beyond the control of,</p> <p style="position:absolute;top:312px;left:108px;white-space:nowrap" class="ft03">MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers,</p> <p style="position:absolute;top:332px;left:108px;white-space:nowrap" class="ft03">arising from or in connection with the information contained herein or the use of or inability to use</p> <p style="position:absolute;top:351px;left:108px;white-space:nowrap" class="ft07">any such information.<br/>NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS,</p> <p style="position:absolute;top:394px;left:108px;white-space:nowrap" class="ft03">COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF</p> <p style="position:absolute;top:413px;left:108px;white-space:nowrap" class="ft03">ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE</p> <p style="position:absolute;top:433px;left:108px;white-space:nowrap" class="ft07">BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.<br/>Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s</p> <p style="position:absolute;top:475px;left:108px;white-space:nowrap" class="ft03">Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and</p> <p style="position:absolute;top:495px;left:108px;white-space:nowrap" class="ft03">municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s</p> <p style="position:absolute;top:514px;left:108px;white-space:nowrap" class="ft03">Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s</p> <p style="position:absolute;top:534px;left:108px;white-space:nowrap" class="ft03">Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from</p> <p style="position:absolute;top:553px;left:108px;white-space:nowrap" class="ft03">$1,000 to approximately $2,700,000. MCO and Moody’s investors Service also maintain policies</p> <p style="position:absolute;top:573px;left:108px;white-space:nowrap" class="ft03">and procedures to address the independence of Moody’s Investors Service credit ratings and credit</p> <p style="position:absolute;top:592px;left:108px;white-space:nowrap" class="ft03">rating processes. Information regarding certain affiliations that may exist between directors of MCO</p> <p style="position:absolute;top:612px;left:108px;white-space:nowrap" class="ft03">and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and</p> <p style="position:absolute;top:631px;left:108px;white-space:nowrap" class="ft03">have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted</p> <p style="position:absolute;top:651px;left:108px;white-space:nowrap" class="ft03">annually at&#160;</p> <p style="position:absolute;top:651px;left:188px;white-space:nowrap" class="ft06">www.moodys.com</p> <p style="position:absolute;top:651px;left:315px;white-space:nowrap" class="ft03">&#160;under the heading “Investor Relations — Corporate Governance —</p> <p style="position:absolute;top:670px;left:108px;white-space:nowrap" class="ft07">Director and Shareholder Affiliation Policy.”<br/>Additional terms for Australia only: Any publication into Australia of this document is pursuant to the</p> <p style="position:absolute;top:713px;left:108px;white-space:nowrap" class="ft03">Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited</p> <p style="position:absolute;top:732px;left:108px;white-space:nowrap" class="ft03">ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136</p> <p style="position:absolute;top:752px;left:108px;white-space:nowrap" class="ft03">972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale</p> <p style="position:absolute;top:771px;left:108px;white-space:nowrap" class="ft03">clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access</p> <p style="position:absolute;top:791px;left:108px;white-space:nowrap" class="ft03">this document from within Australia, you represent to MOODY’S that you are, or are accessing</p> <p style="position:absolute;top:810px;left:108px;white-space:nowrap" class="ft03">the document as a representative of, a “wholesale client” and that neither you nor the entity you</p> <p style="position:absolute;top:830px;left:108px;white-space:nowrap" class="ft03">represent will directly or indirectly disseminate this document or its contents to “retail clients” within</p> <p style="position:absolute;top:849px;left:108px;white-space:nowrap" class="ft03">the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as</p> <p style="position:absolute;top:869px;left:108px;white-space:nowrap" class="ft03">to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or</p> <p style="position:absolute;top:888px;left:108px;white-space:nowrap" class="ft07">any form of security that is available to retail investors.<br/>Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency</p> <p style="position:absolute;top:931px;left:108px;white-space:nowrap" class="ft03">subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc.,</p> <p style="position:absolute;top:950px;left:108px;white-space:nowrap" class="ft03">a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating</p> <p style="position:absolute;top:970px;left:108px;white-space:nowrap" class="ft03">agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization</p> <p style="position:absolute;top:989px;left:108px;white-space:nowrap" class="ft03">(“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-</p> <p style="position:absolute;top:1009px;left:108px;white-space:nowrap" class="ft03">NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated</p> <p style="position:absolute;top:1028px;left:108px;white-space:nowrap" class="ft03">obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit</p> </div> <!-- Page 6 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page6-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PR_1000003985006.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft03">rating agencies registered with the Japan Financial Services Agency and their registration numbers</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft07">are FSA Commissioner (Ratings) No. 2 and 3 respectively.<br/>MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including</p> <p style="position:absolute;top:176px;left:108px;white-space:nowrap" class="ft03">corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated</p> <p style="position:absolute;top:195px;left:108px;white-space:nowrap" class="ft03">by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to</p> <p style="position:absolute;top:215px;left:108px;white-space:nowrap" class="ft03">MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging</p> <p style="position:absolute;top:234px;left:108px;white-space:nowrap" class="ft07">from JPY125,000 to approximately JPY250,000,000.<br/>MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory</p> <p style="position:absolute;top:277px;left:108px;white-space:nowrap" class="ft03">requirements.</p> </div> </body> </html>