U.S. Markets closed
  • Gold

    1,801.00
    +2.20 (+0.12%)
     
  • EUR/USD

    1.1608
    +0.0001 (+0.0116%)
     
  • 10-Yr Bond

    1.5290
    -0.0900 (-5.56%)
     
  • Vix

    16.98
    +1.00 (+6.26%)
     
  • GBP/USD

    1.3742
    -0.0000 (-0.0014%)
     
  • USD/JPY

    113.6260
    -0.1840 (-0.1617%)
     
  • BTC-USD

    58,794.61
    -2,073.86 (-3.41%)
     
  • CMC Crypto 200

    1,408.96
    -65.37 (-4.43%)
     
  • FTSE 100

    7,253.27
    -24.35 (-0.33%)
     
  • Nikkei 225

    28,825.62
    -272.58 (-0.94%)
     

Morgan Stanley -- Moody's upgrades senior debt ratings of Goldman Sachs Group (to A2) and Morgan Stanley (to A1)

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·24 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Rating Action: Moody's upgrades senior debt ratings of Goldman Sachs Group (to A2) and Morgan Stanley (to A1)

Global Credit Research - 27 Jan 2021

New York, January 27, 2021 -- Moody's Investors Service (Moody's) has upgraded the senior unsecured debt and issuer ratings of The Goldman Sachs Group, Inc. (Goldman Sachs) to A2 from A3 and of Morgan Stanley to A1 from A2 as well as the senior unsecured debt ratings of their respective guaranteed subsidiary obligations, including those of GS Finance Corp. (GSFC, to A2 from A3) and Morgan Stanley Finance LLC (MSFL, to A1 from A2). At the same time the rating agency also upgraded to Prime-1 from Prime-2 the short-term ratings of Goldman Sachs and the short-term ratings on subsidiary obligations guaranteed by Goldman Sachs.

With this rating action, the outlooks for Goldman Sachs and Morgan Stanley (and for GSFC and MSFL) have changed to stable from rating under review. Moody's said the other ratings and assessments for Goldman Sachs and Morgan Stanley and their rated subsidiaries are unaffected by today's rating action. A complete list of affected ratings and entities can be found at the end of this press release.

RATINGS RATIONALE

Moody's said the action follows the rating agency's decision to revise the asset loss rate assumption it uses as a part of its Advanced Loss-Given-Failure (LGF) analysis when assessing the magnitude of loss that would accrue to Goldman Sachs's or Morgan Stanley's creditors upon either firm's failure. The rating agency believes the ongoing shift in both firms' business mix will continue, which together with enhancements made to resolution planning and processes since the financial crisis and significant improvements to the resilience and transparency of the capital markets infrastructure increase the likelihood of a more orderly resolution in the event of either firm's failure, as well as greater preservation of the firm's remaining franchise value than Moody's had previously assumed. As a result, the rating agency has lowered its at-failure asset loss rate assumption for both firms to 8% from 13%, bringing this assumption in line with that already used for the firms' global peers.

Moody's said Morgan Stanley's recently completed acquisition of E*TRADE Financial, LLC (E*TRADE, A3 stable) and its announced agreement to acquire Eaton Vance Corp. (Eaton Vance, A3 stable) will further shift Morgan Stanley's business mix toward wealth and investment management activities. Moody's expects these activities to generate profitable sources of generally more stable revenue than Morgan Stanley's capital markets business. The acquisitions will accelerate strategic developments that have already been underway for a number of years, during which time Morgan Stanley has made steady, deliberative progress in developing its wealth and investment management businesses and positioning them for organic and acquisition-based growth.

Similarly, Moody's noted that Goldman Sachs has identified four strategic growth initiatives focused on expanding its earnings in consumer banking, wealth management, corporate transaction services, and third party asset management. Moody's expects that these businesses will generate more stable and recurring revenues than Goldman Sachs's capital markets and principal investing activities. These initiatives build on earlier developments at the firm to expand beyond the firm's core capital markets and principal investing activities, including through the acquisition of GE's consumer deposit platform, the launch of the firm's Marcus consumer lending business, and the acquisition of investment advisory firm United Capital. The firm has already reported some initial success with these initiatives, most notably but not exclusively with the substantial growth in its deposit base.

Moody's has concluded that the strategic initiatives at each firm will continue to reduce their concentration in capital markets activities. As such, a greater proportion of the earnings at each firm will be derived from more stable and recurring revenues which in the event of either firm's failure are more likely to still retain some value that would accrue to the firm's creditors. In addition, the rating agency believes there have been significant improvements to the resilience and transparency of the capital markets infrastructure, which should help reduce client defections at failure and also help mitigate creditor losses. In particular, the expansion of central clearing and agreements in relation to derivatives contracts "stay" protocols will provide for temporary contractual stays on the exercise of default rights by counterparties to a failed institution, reducing but not eliminating the risk of disorderly unwinds and value-destroying fire sales.

Finally, the rating agency noted that over the past five years there have been substantial enhancements made to resolution planning and processes at the largest US banks, including Goldman Sachs and Morgan Stanley, based on detailed guidance and oversight by the Federal Reserve and the FDIC. These plans include comprehensive measurements and ongoing monitoring of the amount of liquidity and contingent capital needed to execute a successful resolution not only at a group level but at each material subsidiary, including the amount of liquidity needed to ensure the retention of key employees during a resolution in order to limit the adverse impact of employee attrition.

The resolution plans also include numerous early warning triggers and runways during which additional actions would be mandated to either recover or implement a resolution, and highly detailed playbooks which contemplate a wide variety of contingencies that might be encountered and actions that might need to be taken during resolution. Moody's believes this comprehensive resolution planning and the embedding of related processes should help mitigate creditor losses in the event one of these firms should fail, and in this regard, the resolution plans for Morgan Stanley and Goldman Sachs are subject to the same oversight and scrutiny as that of their largest US peers, for whom Moody's already assumes an 8% at-failure loss rate.

Under Moody's LGF analysis, the adoption of an 8% loss rate assumption results in a one notch upgrade to the holding company senior unsecured debt ratings at both Morgan Stanley and Goldman Sachs, as well as at similarly rated guaranteed subsidiary obligations. This reflects the improved measure of asset recovery values at failure that would accrue to this class of creditors. At each firm, the holding company senior unsecured debt ratings are now two notches above the Adjusted Baseline Credit Assessment (BCA) assigned to each firm's principal banking subsidiary (a3 at Morgan Stanley Bank, N.A. (MSBNA) and baa1 at Goldman Sachs Bank USA). This is at least one more notch of uplift than is the case at the firm's closest US bank holding company peers due to the significantly greater proportion of holding company debt outstanding at Goldman Sachs and Morgan Stanley, which Moody's believes would provide more loss absorption for holding company senior creditors than is the case at those peers.

In this regard, the rating agency has also assessed Goldman Sachs's and Morgan Stanley's expected funding profile, and has concluded that even though both firms are likely to continue growing deposit funding, they will also continue to have a substantial need to fund assets that cannot be funded with deposits at their bank subsidiaries under US banking regulations. Moody's therefore expects that even if there is some gradual reduction in the amount of holding company debt outstanding, over the medium term the amount of holding company debt outstanding will continue to support two notches of uplift from the adjusted BCA for the ratings of each firm's parent holding company senior unsecured obligations.

Moody's noted that while the improved measure of asset recovery values at failure would also accrue to creditors at the operating subsidiaries of Morgan Stanley and Goldman Sachs, the ratings and assessments at those subsidiaries are unaffected by the changed loss rate assumption since those ratings and assessments are already at the maximum three notches above the Adjusted BCA. In addition, the ratings for the more junior holding company instruments at each firm are also unaffected since the amount of such debt outstanding is relatively modest compared to the substantial amount of holding company senior debt and as such insufficient to provide any ratings uplift from the Adjusted BCA even under the 8% loss rate assumption.

The upgrade of the short-term ratings of Goldman Sachs and the short-term ratings on subsidiary obligations guaranteed by Goldman Sachs to Prime-1 from Prime-2 was driven by the upgrade of the long-term senior debt rating to A2 and reflects Moody's standard linkage between its long-term and short-term rating scales.

The rating outlook for Goldman Sachs is stable, reflecting Moody's expectation that the amount of holding company debt outstanding over the medium term will continue to support two notches of uplift from the adjusted BCA of Goldman Sachs Bank USA and that the group will continue to report solid profitability and capital ratios above those of most of its peers and will maintain its improved funding profile, while its robust risk management and controls framework and strong client relationships will allow the firm to continue to generate lower earnings volatility than at many of its peers.

Morgan Stanley and its rated subsidiaries' stable outlooks reflect Moody's expectation that Morgan Stanley will retain a strong liquidity profile, maintain its improved funding profile, may suffer a temporary dip in profitability during the remainder of the coronavirus crisis, and will over time return increasing amounts of capital and moderately reduce its regulatory capital ratios once the current temporary regulatory restrictions on capital payouts for the largest US banks are lifted.

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

Goldman Sachs's ratings could be upgraded if the firm's tangible common equity ratio were likely to remain above 14% of advanced approaches risk-weighted assets, its reliance on market funds were to fall below 40% of tangible banking assets, and its net income were to exceed 1% of tangible assets, all on a sustainable basis. The ratings could also be upgraded if the firm's strategic initiatives succeed in enhancing its earnings stability and significantly and sustainably increasing its earnings diversification.

Goldman Sachs's ratings could be downgraded if the firm's tangible common equity ratio declines below 12% or net income/tangible assets declines below 0.5% if the firm is unlikely to be able restore either over the near-term. The ratings could also be downgraded if there is a significant increase in the firm's earnings volatility, if the firm suffers from a significant loss of clients or a material erosion of capital due to reputational or legal concerns, or if there are any indications of control or risk management failures, a marked increase in risk appetite, or any deterioration in the firm's liquidity profile. In addition, the parent holding company A2 senior unsecured debt and issuer ratings could be downgraded should Moody's conclude that a significant decline in holding company debt outstanding is likely over the medium term.

Morgan Stanley's and its rated subsidiaries' long-term ratings could be upgraded should there be an improvement in MSBNA's BCA and an upgrade of support-provider Mitsubishi UFJ Financial Group, Inc. (MUFG, A1 senior with stable outlook, a3 BCA at MUFG Bank, Ltd.). MSBNA's BCA could be improved should Morgan Stanley drive and sustain a fundamental shift in business mix towards recurring revenue streams with a continued trend of improved and more stable profitability, accompanied by the maintenance of robust capital and liquidity.

An improvement in MSBNA's BCA without an improvement in the creditworthiness of MUFG is less likely to result in Morgan Stanley's ratings being upgraded. Were MSBNA's BCA to be upgraded by one notch, its BCA would be at the same level as MUFG's lead bank's BCA, at which point it would be unlikely that Morgan Stanley's ratings would continue to benefit from a notch of affiliate support under Moody's joint default analysis, and accordingly MSBNA's Adjusted BCA would remain unchanged.

Morgan Stanley's ratings could be downgraded if prolonged weakening of results, a significant deterioration in loan credit quality or loan underwriting standards, an increase in portfolio concentrations, a deterioration in the firm's liquidity profile, a general increase in risk appetite, or if there are any indications of control or risk management failures. Also, Morgan Stanley's ratings would likely be downgraded should support-provider MUFG be downgraded, or should there be a weakening in Morgan Stanley's and MUFG's operational and strategic relationship.

LIST OF AFFECTED RATINGS

Upgrades, Previously placed on Review for Upgrade:

..Issuer: The Goldman Sachs Group, Inc.

....Senior Unsecured Bond (Local Currency), Upgraded to A2 from A3, Stable from Ratings Under Review

....Senior Unsecured Bond (Foreign Currency), Upgraded to A2 from A3, Stable from Ratings Under Review

....Commercial Paper, Upgraded to P-1 from P-2

....LT Issuer Rating, Upgraded to A2 from A3, Stable from Ratings Under Review

....Senior Unsecured Medium-Term Note Program (Local Currency), Upgraded to (P)A2 from (P)A3

....Senior Unsecured Medium-Term Note Program (Foreign Currency), Upgraded to (P)A2 from (P)A3

....Other Short Term (Local Currency), Upgraded to (P)P-1 from (P)P-2

....Other Short Term (Foreign Currency), Upgraded to (P)P-1 from (P)P-2

....Senior Unsecured Shelf, Upgraded to (P)A2 from (P)A3

..Issuer: GS Finance Corp.

....Backed Senior Unsecured Medium-Term Note Program, Upgraded to (P)A2 from (P)A3

....Backed Senior Unsecured Bond (Local Currency), Upgraded to A2 from A3, Stable from Ratings Under Review

....Backed Senior Unsecured Bond (Foreign Currency), Upgraded to A2 from A3, Stable from Ratings Under Review

....Backed Senior Unsecured Shelf, Upgraded to (P)A2 from (P)A3

..Issuer: Asset Funding Company IV Limited

....Backed Senior Secured Medium-Term Note Program (Foreign Currency), Upgraded to (P)A2 from (P)A3

....Backed Other Short Term (Foreign Currency), Upgraded to (P)P-1 from (P)P-2

..Issuer: Goldman Sachs Canada Finance Co.

....Backed Commercial Paper, Upgraded to P-1 from P-2

..Issuer: Goldman Sachs Financial Products I Limited

....Backed Senior Unsecured Medium-Term Note Program (Foreign Currency), Upgraded to (P)A2 from (P)A3

..Issuer: Goldman Sachs Japan Co., Ltd.

....Backed Commercial Paper, Upgraded to P-1 from P-2

..Issuer: Morgan Stanley

....Senior Unsecured Bond (Local Currency), Upgraded to A1 from A2, Stable from Ratings Under Review

....Senior Unsecured Bond (Foreign Currency), Upgraded to A1 from A2, Stable from Ratings Under Review

....LT Issuer Rating, Upgraded to A1 from A2, Stable from Ratings Under Review

....Senior Unsecured Medium-Term Note Program (Local Currency), Upgraded to (P)A1 from (P)A2

....Senior Unsecured Medium-Term Note Program (Foreign Currency), Upgraded to (P)A1 from (P)A2

....Senior Unsecured Shelf, Upgraded to (P)A1 from (P)A2

..Issuer: Morgan Stanley Finance LLC

....Backed LT Issuer Rating, Upgraded to A1 from A2, Stable from Ratings Under Review

....Backed Senior Unsecured Medium-Term Note Program, Upgraded to (P)A1 from (P)A2

....Backed Senior Unsecured Bond (Local Currency), Upgraded to A1 from A2, Stable from Ratings Under Review

....Backed Senior Unsecured Bond (Foreign Currency), Upgraded to A1 from A2, Stable from Ratings Under Review

....Backed Senior Unsecured Shelf, Upgraded to (P)A1 from (P)A2

Outlook Actions:

..Issuer: The Goldman Sachs Group, Inc.

....Outlook, Changed To Stable From Ratings Under Review

..Issuer: GS Finance Corp.

....Outlook, Changed To Stable From Ratings Under Review

..Issuer: Asset Funding Company IV Limited

....Outlook, Changed To No Outlook From Ratings Under Review

..Issuer: Goldman Sachs Canada Finance Co.

....Outlook, Changed To No Outlook From Ratings Under Review

..Issuer: Goldman Sachs Financial Products I Limited

....Outlook, Changed To No Outlook From Ratings Under Review

..Issuer: Goldman Sachs Japan Co., Ltd.

....Outlook, Changed To No Outlook From Ratings Under Review

..Issuer: Morgan Stanley

....Outlook, Changed To Stable From Ratings Under Review

..Issuer: Morgan Stanley Finance LLC

....Outlook, Changed To Stable From Ratings Under Review

The principal methodology used in these ratings was Banks Methodology published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1147865. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.

The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.

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.

The below contact information is provided for information purposes only. Please see the ratings tab of the issuer page at www.moodys.com, for each of the ratings covered, Moody's disclosures on the lead rating analyst and the Moody's legal entity that has issued the ratings.

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.

David Fanger Senior Vice President Financial Institutions Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Ana Arsov MD - Financial Institutions Financial Institutions Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Donald Robertson Senior Vice President Financial Institutions Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653

© 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.