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Moody's - Outlook for Central and Eastern European sovereigns stable given fiscal, economic resilience but pandemic risks remain

·23 min read

<!DOCTYPE html> <html lang="" xml:lang=""> <head> <title>/nwsys/www/images/PBC_1260362</title> <meta http-equiv="Content-Type" content="text/html; charset=UTF-8"/> <meta name="generator" content="pdftohtml 0.36"/> <meta name="date" content="2021-01-14T04:20:31+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:#000000;} .ft06{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_1260362001.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 - Outlook for Central and Eastern</b></p> <p style="position:absolute;top:180px;left:108px;white-space:nowrap" class="ft01"><b>European sovereigns stable given fiscal, economic resilience but</b></p> <p style="position:absolute;top:204px;left:108px;white-space:nowrap" class="ft01"><b>pandemic risks remain</b></p> <p style="position:absolute;top:268px;left:108px;white-space:nowrap" class="ft02">Paris, January 14, 2021 --</p> <p style="position:absolute;top:299px;left:108px;white-space:nowrap" class="ft05">»&#160;Pandemic’s impact on CEE economic activity has been more muted than in the euro area<br/>»&#160;Medium term growth prospects robust although longer term challenges remain</p> <p style="position:absolute;top:365px;left:108px;white-space:nowrap" class="ft02">The stable 2021 outlook for sovereigns in Central and Eastern Europe (CEE) reflects their robust</p> <p style="position:absolute;top:384px;left:108px;white-space:nowrap" class="ft02">economic growth prospects and strengthened ability to carry and reduce debt, which make their</p> <p style="position:absolute;top:404px;left:108px;white-space:nowrap" class="ft02">credit profiles resilient to the sharp deterioration of their public finances in 2020, Moody’s Investors</p> <p style="position:absolute;top:423px;left:108px;white-space:nowrap" class="ft02">Service said in a report published today. Ageing populations and structural economic change will</p> <p style="position:absolute;top:443px;left:108px;white-space:nowrap" class="ft06">remain longer term challenges for the region.<br/>CEE economies are forecast to grow by 4.1% in 2021 as they recover from a severe 5.1%</p> <p style="position:absolute;top:492px;left:108px;white-space:nowrap" class="ft02">contraction in 2020. Beyond 2021, CEE growth is expected to be more robust and resilient to the</p> <p style="position:absolute;top:512px;left:108px;white-space:nowrap" class="ft02">impact of the pandemic than that of most euro area peers. Lower exposure to tourism, greater</p> <p style="position:absolute;top:531px;left:108px;white-space:nowrap" class="ft02">reliance on industry and manufacturing and an increase in EU funding under the bloc's recovery fund</p> <p style="position:absolute;top:551px;left:108px;white-space:nowrap" class="ft06">are some of the factors supporting the robust growth outlook.<br/>“Despite debt and deficits sharply rising across Central and Eastern Europe in 2021, increases in</p> <p style="position:absolute;top:601px;left:108px;white-space:nowrap" class="ft02">governments’ ability to carry and reduce debt and the region's robust medium-term growth prospects</p> <p style="position:absolute;top:620px;left:108px;white-space:nowrap" class="ft02">will support the resilience of their credit profiles,” says Petter Bryman, Assistant Vice President –</p> <p style="position:absolute;top:640px;left:108px;white-space:nowrap" class="ft02">Analyst at Moody’s Investors Service. “That said, the evolution of the underlying public health crisis</p> <p style="position:absolute;top:659px;left:108px;white-space:nowrap" class="ft02">triggered by the pandemic remains uncertain, despite the roll-out of mass vaccination programmes,</p> <p style="position:absolute;top:679px;left:108px;white-space:nowrap" class="ft02">and continues to pose risks for the region's economic outlook in 2021. A weaker-than-expected</p> <p style="position:absolute;top:698px;left:108px;white-space:nowrap" class="ft02">rebound or renewed recession would hurt public finances and otherwise resilient banks, and could</p> <p style="position:absolute;top:718px;left:108px;white-space:nowrap" class="ft06">potentially create political strains.”<br/>Over the longer term, CEE economies still face structural hurdles to economic growth and longer</p> <p style="position:absolute;top:768px;left:108px;white-space:nowrap" class="ft02">term economic development, most notably due to rapid population ageing. This poses a number of</p> <p style="position:absolute;top:787px;left:108px;white-space:nowrap" class="ft02">challenges to economic strength and fiscal sustainability, that will become increasingly prominent</p> <p style="position:absolute;top:807px;left:108px;white-space:nowrap" class="ft02">over the 2020s and beyond. However, the immediate symptoms, such as labour shortages and</p> <p style="position:absolute;top:826px;left:108px;white-space:nowrap" class="ft02">deteriorating cost competitiveness, will be less prominent in 2021 as CEE economies emerge from</p> <p style="position:absolute;top:846px;left:108px;white-space:nowrap" class="ft06">the pandemic.<br/>Subscribers can access the report at:&#160;</p> <p style="position:absolute;top:876px;left:372px;white-space:nowrap" class="ft04">http://www.moodys.com/researchdocumentcontentpage.aspx?</p> <p style="position:absolute;top:895px;left:108px;white-space:nowrap" class="ft04">docid=PBC_1246819</p> <p style="position:absolute;top:926px;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:945px;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:965px;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> <p style="position:absolute;top:984px;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:1004px;left:108px;white-space:nowrap" class="ft02">us at mediarelations@moodys.com or visit our web site at www.moodys.com.</p> </div> <!-- Page 2 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft07{font-size:13px;font-family:Times;color:#0d0c0c;} .ft08{font-size:13px;line-height:22px;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_1260362002.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft02">This publication does not announce a credit rating action. For any credit ratings referenced in this</p> <p style="position:absolute;top:133px;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:133px;left:574px;white-space:nowrap" class="ft04">www.moodys.com</p> <p style="position:absolute;top:133px;left:701px;white-space:nowrap" class="ft02">&#160;for the most</p> <p style="position:absolute;top:153px;left:108px;white-space:nowrap" class="ft06">updated credit rating action information and rating history.<br/>Petter Bryman</p> <p style="position:absolute;top:202px;left:108px;white-space:nowrap" class="ft02">AVP-Analyst</p> <p style="position:absolute;top:222px;left:108px;white-space:nowrap" class="ft02">Sovereign Risk Group</p> <p style="position:absolute;top:241px;left:108px;white-space:nowrap" class="ft02">Moody's Deutschland GmbH</p> <p style="position:absolute;top:261px;left:108px;white-space:nowrap" class="ft02">JOURNALISTS: 44 20 7772 5456</p> <p style="position:absolute;top:280px;left:108px;white-space:nowrap" class="ft06">Client Service: 44 20 7772 5454<br/>Alastair Wilson</p> <p style="position:absolute;top:330px;left:108px;white-space:nowrap" class="ft02">MD-Global Sovereign Risk</p> <p style="position:absolute;top:350px;left:108px;white-space:nowrap" class="ft02">Sovereign Risk Group</p> <p style="position:absolute;top:369px;left:108px;white-space:nowrap" class="ft02">Moody's Investors Service Ltd.</p> <p style="position:absolute;top:389px;left:108px;white-space:nowrap" class="ft02">JOURNALISTS: 44 20 7772 5456</p> <p style="position:absolute;top:408px;left:108px;white-space:nowrap" class="ft06">Client Service: 44 20 7772 5454<br/>Releasing Office:</p> <p style="position:absolute;top:458px;left:108px;white-space:nowrap" class="ft02">Moody's France SAS</p> <p style="position:absolute;top:477px;left:108px;white-space:nowrap" class="ft02">96 Boulevard Haussmann</p> <p style="position:absolute;top:497px;left:108px;white-space:nowrap" class="ft02">Paris, 75008</p> <p style="position:absolute;top:516px;left:108px;white-space:nowrap" class="ft02">France</p> <p style="position:absolute;top:536px;left:108px;white-space:nowrap" class="ft02">JOURNALISTS: 44 20 7772 5456</p> <p style="position:absolute;top:555px;left:108px;white-space:nowrap" class="ft02">Client Service: 44 20 7772 5454</p> <p style="position:absolute;top:645px;left:108px;white-space:nowrap" class="ft02">© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their</p> <p style="position:absolute;top:664px;left:108px;white-space:nowrap" class="ft08">licensors and affiliates (collectively, “MOODY’S”). All rights reserved.<br/><b>CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT</b></p> <p style="position:absolute;top:707px;left:108px;white-space:nowrap" class="ft07"><b>OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS,</b></p> <p style="position:absolute;top:726px;left:108px;white-space:nowrap" class="ft07"><b>OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND</b></p> <p style="position:absolute;top:746px;left:108px;white-space:nowrap" class="ft07"><b>INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE</b></p> <p style="position:absolute;top:765px;left:108px;white-space:nowrap" class="ft07"><b>SUCH CURRENT OPINIONS. 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CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK,</b></p> <p style="position:absolute;top:882px;left:108px;white-space:nowrap" class="ft07"><b>INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE</b></p> <p style="position:absolute;top:902px;left:108px;white-space:nowrap" class="ft07"><b>VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND</b></p> <p style="position:absolute;top:921px;left:108px;white-space:nowrap" class="ft07"><b>OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS</b></p> <p style="position:absolute;top:941px;left:108px;white-space:nowrap" class="ft07"><b>OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE</b></p> <p style="position:absolute;top:960px;left:108px;white-space:nowrap" class="ft07"><b>QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS</b></p> <p style="position:absolute;top:980px;left:108px;white-space:nowrap" class="ft07"><b>OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. 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IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER</p> <p style="position:absolute;top:371px;left:108px;white-space:nowrap" class="ft010">PROFESSIONAL ADVISER.<br/>ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT</p> <p style="position:absolute;top:413px;left:108px;white-space:nowrap" class="ft02">LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR</p> <p style="position:absolute;top:433px;left:108px;white-space:nowrap" class="ft02">OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED,</p> <p style="position:absolute;top:452px;left:108px;white-space:nowrap" class="ft02">DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR</p> <p style="position:absolute;top:472px;left:108px;white-space:nowrap" class="ft02">ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY</p> <p style="position:absolute;top:491px;left:108px;white-space:nowrap" class="ft010">MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.<br/>MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE</p> <p style="position:absolute;top:534px;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:553px;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:573px;left:108px;white-space:nowrap" class="ft010">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:615px;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:635px;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:654px;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:674px;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:693px;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:713px;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:732px;left:108px;white-space:nowrap" class="ft010">preparing its Publications.<br/>To the extent permitted by law, MOODY’S and its directors, officers, employees, agents,</p> <p style="position:absolute;top:775px;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:794px;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:814px;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:833px;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:853px;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:872px;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:892px;left:108px;white-space:nowrap" class="ft010">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:934px;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:954px;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:973px;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:993px;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> <p style="position:absolute;top:1012px;left:108px;white-space:nowrap" class="ft02">MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers,</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_1260362004.png" alt="background image"/> <p style="position:absolute;top:114px;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:133px;left:108px;white-space:nowrap" class="ft010">any such information.<br/>NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS,</p> <p style="position:absolute;top:176px;left:108px;white-space:nowrap" class="ft02">COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF</p> <p style="position:absolute;top:195px;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:215px;left:108px;white-space:nowrap" class="ft010">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:257px;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:277px;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:296px;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:316px;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:335px;left:108px;white-space:nowrap" class="ft02">$1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies</p> <p style="position:absolute;top:355px;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:374px;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:394px;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:413px;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:433px;left:108px;white-space:nowrap" class="ft02">annually at&#160;</p> <p style="position:absolute;top:433px;left:188px;white-space:nowrap" class="ft04">www.moodys.com</p> <p style="position:absolute;top:433px;left:315px;white-space:nowrap" class="ft02">&#160;under the heading “Investor Relations — Corporate Governance —</p> <p style="position:absolute;top:452px;left:108px;white-space:nowrap" class="ft010">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:495px;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:514px;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:534px;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:553px;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:573px;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:592px;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:612px;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:631px;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:651px;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:670px;left:108px;white-space:nowrap" class="ft010">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:713px;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:732px;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:752px;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:771px;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:791px;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:810px;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:830px;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:849px;left:108px;white-space:nowrap" class="ft010">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:892px;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:911px;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:931px;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:950px;left:108px;white-space:nowrap" class="ft010">from JPY125,000 to approximately JPY550,000,000.<br/>MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory</p> <p style="position:absolute;top:993px;left:108px;white-space:nowrap" class="ft02">requirements.</p> </div> </body> </html>