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Commonwealth Bank of Australia -- Moody's - Australia’s big four banks to feel pressure from weaker loan quality and slowing credit growth

·23 mins read

<!DOCTYPE html> <html lang="" xml:lang=""> <head> <title>/nwsys/www/images/PBC_1243819</title> <meta http-equiv="Content-Type" content="text/html; charset=UTF-8"/> <meta name="generator" content="pdftohtml 0.36"/> <meta name="date" content="2020-09-01T00:50:26+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:13px;font-family:Times;color:#0d0c0c;} .ft03{font-size:13px;font-family:Times;color:#000000;} .ft04{font-size:13px;font-family:Times;color:#1b62b7;} .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/PBC_1243819001.png" alt="background image"/> <p style="position:absolute;top:155px;left:108px;white-space:nowrap" class="ft00"><b>Research Announcement:&#160;</b></p> <p style="position:absolute;top:155px;left:364px;white-space:nowrap" class="ft01"><b>Moody's - Australia’s big four banks to feel</b></p> <p style="position:absolute;top:180px;left:108px;white-space:nowrap" class="ft01"><b>pressure from weaker loan quality and slowing credit growth</b></p> <p style="position:absolute;top:216px;left:108px;white-space:nowrap" class="ft02">Sydney, September 01, 2020 --</p> <p style="position:absolute;top:246px;left:108px;white-space:nowrap" class="ft03">»&#160;Nonperforming loans to rise significantly toward the end of March 2021, when forbearance</p> <p style="position:absolute;top:266px;left:127px;white-space:nowrap" class="ft03">programs expire</p> <p style="position:absolute;top:296px;left:108px;white-space:nowrap" class="ft03">»&#160;Weak economy will weigh on profitability and capital, while downside risk remains</p> <p style="position:absolute;top:332px;left:108px;white-space:nowrap" class="ft02">Moody’s Investors Service says in a new report that pressure continued to rise for Australia’s four</p> <p style="position:absolute;top:351px;left:108px;white-space:nowrap" class="ft02">major banks during the June quarter, as the coronavirus weighs on asset quality, profitability and</p> <p style="position:absolute;top:371px;left:108px;white-space:nowrap" class="ft05">capital.<br/>“IMPORTANT NOTICE: MOODY'S RATINGS AND PUBLICATIONS ARE NOT INTENDED FOR</p> <p style="position:absolute;top:421px;left:108px;white-space:nowrap" class="ft02">USE BY RETAIL INVESTORS. SUCH USE WOULD BE RECKLESS AND INAPPROPRIATE. SEE</p> <p style="position:absolute;top:440px;left:108px;white-space:nowrap" class="ft05">FULL DISCLAIMERS BELOW.”<br/>The four banks are Australia and New Zealand Banking Group Limited (ANZ, Aa3/ Aa3 stable, a2),</p> <p style="position:absolute;top:490px;left:108px;white-space:nowrap" class="ft02">Commonwealth Bank of Australia (CBA, Aa3/Aa3 stable, a2), National Australia Bank Limited (NAB,</p> <p style="position:absolute;top:509px;left:108px;white-space:nowrap" class="ft05">Aa3/Aa3 stable, a2) and Westpac Banking Corporation (WBC, Aa3/Aa3 stable, a2).<br/>“We have already seen an uptick in nonperforming loan (NPLs) at all four banks, but we expect the</p> <p style="position:absolute;top:559px;left:108px;white-space:nowrap" class="ft02">full impact of the coronavirus-led downturn to become more visible only towards the end of March</p> <p style="position:absolute;top:579px;left:108px;white-space:nowrap" class="ft02">2021, when the unprecedented loan forbearance programs are set to expire,” says Daniel Yu, a</p> <p style="position:absolute;top:598px;left:108px;white-space:nowrap" class="ft05">Moody’s Vice President and Senior Analyst.<br/>“Significant downside risk remains in the form of extended economic disruption, which would test the</p> <p style="position:absolute;top:648px;left:108px;white-space:nowrap" class="ft05">sufficiency of the banks’ already strengthened loan loss reserves and drive up credit costs,” adds Yu.<br/>The near-term outlook for the banks is bleak, as tighter lending criteria will constrain growth in</p> <p style="position:absolute;top:698px;left:108px;white-space:nowrap" class="ft02">housing loans, while weak household confidence is likely to suppress credit demand. Growth in</p> <p style="position:absolute;top:717px;left:108px;white-space:nowrap" class="ft02">business loans has dropped off since March, when many institutional and corporate customers</p> <p style="position:absolute;top:737px;left:108px;white-space:nowrap" class="ft02">drew down on their credit lines to boost liquidity, and is likely to remain weak due to the challenging</p> <p style="position:absolute;top:756px;left:108px;white-space:nowrap" class="ft05">economic conditions.<br/>Meanwhile, the low interest rate environment and intense lending competition will keep net interest</p> <p style="position:absolute;top:806px;left:108px;white-space:nowrap" class="ft02">margins (NIMs) under pressure. Weak loan growth and NIM contraction will constrain revenue</p> <p style="position:absolute;top:826px;left:108px;white-space:nowrap" class="ft05">growth amid increasing credit costs.<br/>Although the four banks' capitalization continued to strengthen during the June quarter, it will come</p> <p style="position:absolute;top:875px;left:108px;white-space:nowrap" class="ft02">under pressure as deterioration in asset quality will drive increases in credit risk-weighted assets,</p> <p style="position:absolute;top:895px;left:108px;white-space:nowrap" class="ft05">while internal capital generation will weaken in line with revenue growth.<br/>Subscribers can access the report “ANZ, CBA, NAB, WBC: June quarter update: Asset</p> <p style="position:absolute;top:945px;left:108px;white-space:nowrap" class="ft02">quality deterioration amid coronavirus stress will pressure profitability and capital” at:&#160;</p> <p style="position:absolute;top:945px;left:699px;white-space:nowrap" class="ft04">http://</p> <p style="position:absolute;top:964px;left:108px;white-space:nowrap" class="ft04">www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243040</p> <p style="position:absolute;top:994px;left:108px;white-space:nowrap" class="ft02">NOTE TO JOURNALISTS ONLY: For more information, please call one of our global</p> <p style="position:absolute;top:1014px;left:108px;white-space:nowrap" class="ft02">press information hotlines: New York <PhoneNo>+1-212-553-0376</PhoneNo>, London <PhoneNo>+44-20-7772-5456</PhoneNo>, Tokyo</p> <p style="position:absolute;top:1033px;left:108px;white-space:nowrap" class="ft02"><PhoneNo>+813-5408-4110</PhoneNo>, Hong Kong <PhoneNo>+852-3758-1350</PhoneNo>, Sydney <PhoneNo>+61-2-9270-8141</PhoneNo>, Mexico City</p> </div> <!-- Page 2 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft06{font-size:13px;line-height:23px;font-family:Times;color:#0d0c0c;} --> </style> <div id="page2-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1243819002.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft02"><PhoneNo>001-888-779-5833</PhoneNo>, São Paulo <PhoneNo>0800-891-2518</PhoneNo>, or Buenos Aires <PhoneNo>0800-666-3506</PhoneNo>. You can also email</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft05">us at mediarelations@moodys.com or visit our web site at www.moodys.com.<br/>This publication does not announce a credit rating action. For any credit ratings referenced in this</p> <p style="position:absolute;top:183px;left:108px;white-space:nowrap" class="ft02">publication, please see the ratings tab on the issuer/entity page on&#160;</p> <p style="position:absolute;top:183px;left:574px;white-space:nowrap" class="ft04">www.moodys.com</p> <p style="position:absolute;top:183px;left:701px;white-space:nowrap" class="ft02">&#160;for the most</p> <p style="position:absolute;top:202px;left:108px;white-space:nowrap" class="ft05">updated credit rating action information and rating history.<br/>Daniel Yu, CFA</p> <p style="position:absolute;top:252px;left:108px;white-space:nowrap" class="ft02">VP-Senior Analyst</p> <p style="position:absolute;top:272px;left:108px;white-space:nowrap" class="ft02">Financial Institutions Group</p> <p style="position:absolute;top:291px;left:108px;white-space:nowrap" class="ft02">Moody's Investors Service Pty. Ltd.</p> <p style="position:absolute;top:311px;left:108px;white-space:nowrap" class="ft02">JOURNALISTS: 61 2 9270 8141</p> <p style="position:absolute;top:330px;left:108px;white-space:nowrap" class="ft05">Client Service: 852 3551 3077<br/>Patrick Winsbury</p> <p style="position:absolute;top:380px;left:108px;white-space:nowrap" class="ft02">Associate Managing Director</p> <p style="position:absolute;top:399px;left:108px;white-space:nowrap" class="ft02">Corporate Finance Group</p> <p style="position:absolute;top:419px;left:108px;white-space:nowrap" class="ft02">Moody's Investors Service Pty. Ltd.</p> <p style="position:absolute;top:438px;left:108px;white-space:nowrap" class="ft02">JOURNALISTS: 61 2 9270 8141</p> <p style="position:absolute;top:458px;left:108px;white-space:nowrap" class="ft05">Client Service: 852 3551 3077<br/>Releasing Office:</p> <p style="position:absolute;top:508px;left:108px;white-space:nowrap" class="ft02">Moody's Investors Service Pty. Ltd.</p> <p style="position:absolute;top:527px;left:108px;white-space:nowrap" class="ft02">Level 10</p> <p style="position:absolute;top:547px;left:108px;white-space:nowrap" class="ft02">1 O'Connell Street</p> <p style="position:absolute;top:566px;left:108px;white-space:nowrap" class="ft02">Sydney, NSW 2000</p> <p style="position:absolute;top:586px;left:108px;white-space:nowrap" class="ft02">Australia</p> <p style="position:absolute;top:605px;left:108px;white-space:nowrap" class="ft02">JOURNALISTS: 61 2 9270 8141</p> <p style="position:absolute;top:625px;left:108px;white-space:nowrap" class="ft02">Client Service: 852 3551 3077</p> <p style="position:absolute;top:714px;left:108px;white-space:nowrap" class="ft02">© 2020 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their</p> <p style="position:absolute;top:734px;left:108px;white-space:nowrap" class="ft06">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:776px;left:108px;white-space:nowrap" class="ft02">RATINGS AFFILIATES ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE</p> <p style="position:absolute;top:796px;left:108px;white-space:nowrap" class="ft02">CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES,</p> <p style="position:absolute;top:815px;left:108px;white-space:nowrap" class="ft02">AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S</p> <p style="position:absolute;top:835px;left:108px;white-space:nowrap" class="ft02">(COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S</p> <p style="position:absolute;top:854px;left:108px;white-space:nowrap" class="ft02">INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT</p> <p style="position:absolute;top:874px;left:108px;white-space:nowrap" class="ft02">MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY</p> <p style="position:absolute;top:893px;left:108px;white-space:nowrap" class="ft02">ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S</p> <p style="position:absolute;top:913px;left:108px;white-space:nowrap" class="ft02">RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES</p> <p style="position:absolute;top:932px;left:108px;white-space:nowrap" class="ft02">OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S INVESTORS</p> <p style="position:absolute;top:952px;left:108px;white-space:nowrap" class="ft02">SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK,</p> <p style="position:absolute;top:971px;left:108px;white-space:nowrap" class="ft02">INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE</p> <p style="position:absolute;top:991px;left:108px;white-space:nowrap" class="ft02">VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER</p> <p style="position:absolute;top:1010px;left:108px;white-space:nowrap" class="ft02">OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT</p> <p style="position:absolute;top:1030px;left:108px;white-space:nowrap" class="ft02">OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE</p> <p style="position:absolute;top:1049px;left:108px;white-space:nowrap" class="ft02">MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY</p> </div> <!-- Page 3 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page3-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PBC_1243819003.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft02">PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. 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ALL INFORMATION CONTAINED HEREIN IS PROTECTED</p> <p style="position:absolute;top:449px;left:108px;white-space:nowrap" class="ft02">BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH</p> <p style="position:absolute;top:468px;left:108px;white-space:nowrap" class="ft02">INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER</p> <p style="position:absolute;top:488px;left:108px;white-space:nowrap" class="ft02">TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED</p> <p style="position:absolute;top:507px;left:108px;white-space:nowrap" class="ft02">FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM</p> <p style="position:absolute;top:527px;left:108px;white-space:nowrap" class="ft02">OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S</p> <p style="position:absolute;top:546px;left:108px;white-space:nowrap" class="ft06">PRIOR WRITTEN CONSENT.<br/>MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE</p> <p style="position:absolute;top:589px;left:108px;white-space:nowrap" class="ft02">NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED</p> <p style="position:absolute;top:608px;left:108px;white-space:nowrap" class="ft02">FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT</p> <p style="position:absolute;top:628px;left:108px;white-space:nowrap" class="ft06">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:670px;left:108px;white-space:nowrap" class="ft02">accurate and reliable. Because of the possibility of human or mechanical error as well as other</p> <p style="position:absolute;top:690px;left:108px;white-space:nowrap" class="ft02">factors, however, all information contained herein is provided “AS IS” without warranty of any kind.</p> <p style="position:absolute;top:709px;left:108px;white-space:nowrap" class="ft02">MOODY'S adopts all necessary measures so that the information it uses in assigning a credit</p> <p style="position:absolute;top:729px;left:108px;white-space:nowrap" class="ft02">rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when</p> <p style="position:absolute;top:748px;left:108px;white-space:nowrap" class="ft02">appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot</p> <p style="position:absolute;top:768px;left:108px;white-space:nowrap" class="ft02">in every instance independently verify or validate information received in the rating process or in</p> <p style="position:absolute;top:787px;left:108px;white-space:nowrap" class="ft06">preparing its Publications.<br/>To the extent permitted by law, MOODY’S and its directors, officers, employees, agents,</p> <p style="position:absolute;top:830px;left:108px;white-space:nowrap" class="ft02">representatives, licensors and suppliers disclaim liability to any person or entity for any indirect,</p> <p style="position:absolute;top:849px;left:108px;white-space:nowrap" class="ft02">special, consequential, or incidental losses or damages whatsoever arising from or in connection</p> <p style="position:absolute;top:869px;left:108px;white-space:nowrap" class="ft02">with the information contained herein or the use of or inability to use any such information, even if</p> <p style="position:absolute;top:888px;left:108px;white-space:nowrap" class="ft02">MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers</p> <p style="position:absolute;top:908px;left:108px;white-space:nowrap" class="ft02">is advised in advance of the possibility of such losses or damages, including but not limited to:</p> <p style="position:absolute;top:927px;left:108px;white-space:nowrap" class="ft02">(a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant</p> <p style="position:absolute;top:947px;left:108px;white-space:nowrap" class="ft06">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:989px;left:108px;white-space:nowrap" class="ft02">representatives, licensors and suppliers disclaim liability for any direct or compensatory losses</p> <p style="position:absolute;top:1009px;left:108px;white-space:nowrap" class="ft02">or damages caused to any person or entity, including but not limited to by any negligence (but</p> <p style="position:absolute;top:1028px;left:108px;white-space:nowrap" class="ft02">excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt,</p> <p style="position:absolute;top:1048px;left:108px;white-space:nowrap" class="ft02">by law cannot be excluded) on the part of, or any contingency within or beyond the control of,</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/PBC_1243819004.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft02">MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers,</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft02">arising from or in connection with the information contained herein or the use of or inability to use</p> <p style="position:absolute;top:153px;left:108px;white-space:nowrap" class="ft06">any such information.<br/>NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS,</p> <p style="position:absolute;top:195px;left:108px;white-space:nowrap" class="ft02">COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF</p> <p style="position:absolute;top:215px;left:108px;white-space:nowrap" class="ft02">ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE</p> <p style="position:absolute;top:234px;left:108px;white-space:nowrap" class="ft06">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:277px;left:108px;white-space:nowrap" class="ft02">Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and</p> <p style="position:absolute;top:296px;left:108px;white-space:nowrap" class="ft02">municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s</p> <p style="position:absolute;top:316px;left:108px;white-space:nowrap" class="ft02">Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s</p> <p style="position:absolute;top:335px;left:108px;white-space:nowrap" class="ft02">Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from</p> <p style="position:absolute;top:355px;left:108px;white-space:nowrap" class="ft02">$1,000 to approximately $2,700,000. MCO and Moody’s Investors Service also maintain policies</p> <p style="position:absolute;top:374px;left:108px;white-space:nowrap" class="ft02">and procedures to address the independence of Moody’s Investors Service credit ratings and credit</p> <p style="position:absolute;top:394px;left:108px;white-space:nowrap" class="ft02">rating processes. Information regarding certain affiliations that may exist between directors of MCO</p> <p style="position:absolute;top:413px;left:108px;white-space:nowrap" class="ft02">and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and</p> <p style="position:absolute;top:433px;left:108px;white-space:nowrap" class="ft02">have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted</p> <p style="position:absolute;top:452px;left:108px;white-space:nowrap" class="ft02">annually at&#160;</p> <p style="position:absolute;top:452px;left:188px;white-space:nowrap" class="ft04">www.moodys.com</p> <p style="position:absolute;top:452px;left:315px;white-space:nowrap" class="ft02">&#160;under the heading “Investor Relations — Corporate Governance —</p> <p style="position:absolute;top:472px;left:108px;white-space:nowrap" class="ft06">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:514px;left:108px;white-space:nowrap" class="ft02">Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited</p> <p style="position:absolute;top:534px;left:108px;white-space:nowrap" class="ft02">ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136</p> <p style="position:absolute;top:553px;left:108px;white-space:nowrap" class="ft02">972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale</p> <p style="position:absolute;top:573px;left:108px;white-space:nowrap" class="ft02">clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access</p> <p style="position:absolute;top:592px;left:108px;white-space:nowrap" class="ft02">this document from within Australia, you represent to MOODY’S that you are, or are accessing</p> <p style="position:absolute;top:612px;left:108px;white-space:nowrap" class="ft02">the document as a representative of, a “wholesale client” and that neither you nor the entity you</p> <p style="position:absolute;top:631px;left:108px;white-space:nowrap" class="ft02">represent will directly or indirectly disseminate this document or its contents to “retail clients” within</p> <p style="position:absolute;top:651px;left:108px;white-space:nowrap" class="ft02">the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as</p> <p style="position:absolute;top:670px;left:108px;white-space:nowrap" class="ft02">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:690px;left:108px;white-space:nowrap" class="ft06">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:732px;left:108px;white-space:nowrap" class="ft02">subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc.,</p> <p style="position:absolute;top:752px;left:108px;white-space:nowrap" class="ft02">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:771px;left:108px;white-space:nowrap" class="ft02">agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization</p> <p style="position:absolute;top:791px;left:108px;white-space:nowrap" class="ft02">(“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-</p> <p style="position:absolute;top:810px;left:108px;white-space:nowrap" class="ft02">NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated</p> <p style="position:absolute;top:830px;left:108px;white-space:nowrap" class="ft02">obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit</p> <p style="position:absolute;top:849px;left:108px;white-space:nowrap" class="ft02">rating agencies registered with the Japan Financial Services Agency and their registration numbers</p> <p style="position:absolute;top:869px;left:108px;white-space:nowrap" class="ft06">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:911px;left:108px;white-space:nowrap" class="ft02">corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated</p> <p style="position:absolute;top:931px;left:108px;white-space:nowrap" class="ft02">by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to</p> <p style="position:absolute;top:950px;left:108px;white-space:nowrap" class="ft02">MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging</p> <p style="position:absolute;top:970px;left:108px;white-space:nowrap" class="ft06">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:1012px;left:108px;white-space:nowrap" class="ft02">requirements.</p> </div> </body> </html>