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New York Life Capital Corporation -- Moody's affirms New York Life's Aaa insurance financial strength rating; outlook remains negative

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<!DOCTYPE html> <html lang="" xml:lang=""> <head> <title>/nwsys/www/images/PR_1000003472</title> <meta http-equiv="Content-Type" content="text/html; charset=UTF-8"/> <meta name="generator" content="pdftohtml 0.36"/> <meta name="date" content="2021-01-06T16:00:33+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_1000003472001.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 New York Life's Aaa insurance financial</b></p> <p style="position:absolute;top:187px;left:108px;white-space:nowrap" class="ft01"><b>strength rating; outlook remains negative</b></p> <p style="position:absolute;top:234px;left:108px;white-space:nowrap" class="ft02"><b>6 January 2021</b></p> <p style="position:absolute;top:267px;left:108px;white-space:nowrap" class="ft03">New York, January 6, 2021 – Moody's Investors Service has affirmed the Aaa insurance financial</p> <p style="position:absolute;top:287px;left:108px;white-space:nowrap" class="ft03">strength ratings of New York Life Insurance Company and its affiliate, New York Life Insurance &amp;</p> <p style="position:absolute;top:306px;left:108px;white-space:nowrap" class="ft03">Annuity Corporation (collectively, New York Life), but has maintained the negative outlook. Other</p> <p style="position:absolute;top:326px;left:108px;white-space:nowrap" class="ft03">affiliated ratings were also affirmed with a negative outlook (see below for a complete rating list).</p> <p style="position:absolute;top:345px;left:108px;white-space:nowrap" class="ft03">The rating action follows the closing of New York Life’s acquisition of the group life and disability</p> <p style="position:absolute;top:365px;left:108px;white-space:nowrap" class="ft03">insurance business from Cigna (Cigna Corporation; senior debt at Baa2, stable outlook) on</p> <p style="position:absolute;top:384px;left:108px;white-space:nowrap" class="ft04">December 31, 2020, for $6.3 billion.<br/>RATINGS RATIONALE<br/>The affirmation of New York Life Insurance Company's ratings is based on its strengths as the</p> <p style="position:absolute;top:466px;left:108px;white-space:nowrap" class="ft03">largest US mutual life insurer, with a leading position in the US life insurance market and a</p> <p style="position:absolute;top:485px;left:108px;white-space:nowrap" class="ft03">large, profitable in-force block of participating whole life (par WL), its strong business diversity,</p> <p style="position:absolute;top:505px;left:108px;white-space:nowrap" class="ft03">now including Cigna's leading employee benefits (EB) business, good distribution, and strong</p> <p style="position:absolute;top:524px;left:108px;white-space:nowrap" class="ft03">capitalization. The firm’s commitment to mutuality, with a long-term focus on policyholders and</p> <p style="position:absolute;top:544px;left:108px;white-space:nowrap" class="ft05">creditors is a key rating consideration.<br/>Commenting on the continuing negative outlook, Moody’s said it reflects the incrementally greater</p> <p style="position:absolute;top:594px;left:108px;white-space:nowrap" class="ft03">risk of New York Life's liability profile, given the addition of the Cigna EB liabilities. While the EB</p> <p style="position:absolute;top:613px;left:108px;white-space:nowrap" class="ft03">business will broaden the company’s already diversified business profile in terms of premiums,</p> <p style="position:absolute;top:633px;left:108px;white-space:nowrap" class="ft03">earnings and reserves, it will also further reduce the relative proportion of par whole life reserves</p> <p style="position:absolute;top:652px;left:108px;white-space:nowrap" class="ft03">over time (at 27% of total statutory liabilities at year-end 2019), which Moody’s considers the most</p> <p style="position:absolute;top:672px;left:108px;white-space:nowrap" class="ft03">creditworthy of products. The rating agency said that it expects the growth of other, non-par business</p> <p style="position:absolute;top:691px;left:108px;white-space:nowrap" class="ft03">earnings, which are used to help support the par whole life dividend, to continue to grow relative as a</p> <p style="position:absolute;top:711px;left:108px;white-space:nowrap" class="ft05">percentage of total.<br/>While Moody’s looks through the short-term impact of the pandemic in its assessment of life</p> <p style="position:absolute;top:761px;left:108px;white-space:nowrap" class="ft03">insurers, including NYL, the negative outlook on NYL contemplates longer-term pressures on the</p> <p style="position:absolute;top:780px;left:108px;white-space:nowrap" class="ft03">company related to the coronavirus, namely the impact of ultralow interest rates, and the impact of</p> <p style="position:absolute;top:800px;left:108px;white-space:nowrap" class="ft03">a potentially uneven economic recovery on the performance of NYL’s investment portfolio. Moody’s</p> <p style="position:absolute;top:819px;left:108px;white-space:nowrap" class="ft03">notes that the pandemic has increased NYL’s mortality relative to pricing expectations, and although</p> <p style="position:absolute;top:839px;left:108px;white-space:nowrap" class="ft03">the financial impact on the company has been modest to date, such exposure will increase with</p> <p style="position:absolute;top:858px;left:108px;white-space:nowrap" class="ft03">Cigna’s group life insurance business. The rating agency added that NYL’s NAIC Risk-Based</p> <p style="position:absolute;top:878px;left:108px;white-space:nowrap" class="ft03">Capital ratio, which has been lower than that of other mutual peers, is somewhat mitigated by higher</p> <p style="position:absolute;top:897px;left:108px;white-space:nowrap" class="ft05">reserves required by New York State.<br/>FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS<br/>The following combination of factors could return New York Life’s ratings to stable from negative:</p> <p style="position:absolute;top:977px;left:108px;white-space:nowrap" class="ft03">the successful integration of the Cigna transaction, with group life and disability income persistency,</p> <p style="position:absolute;top:997px;left:108px;white-space:nowrap" class="ft03">sales, and earnings as expected; strategic focus on the growth of par WL and risk-sharing products</p> <p style="position:absolute;top:1016px;left:108px;white-space:nowrap" class="ft03">relative to less creditworthy products; asset quality, losses and impairments consistent with Moody’s</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_1000003472002.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft03">expectations; company action level NAIC RBC ratio above 450% on a consistent basis; adjusted</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft05">financial leverage of less than 20%; earnings coverage greater than 10x.<br/>The following factors could lead to a downgrade New York Life’s ratings: a downgrade of the</p> <p style="position:absolute;top:183px;left:108px;white-space:nowrap" class="ft03">US government rating; challenges integrating the Cigna transaction, contributing to higher-than-</p> <p style="position:absolute;top:202px;left:108px;white-space:nowrap" class="ft03">expected lapse rates, weakening market positions, and declining group life and/or disability income</p> <p style="position:absolute;top:222px;left:108px;white-space:nowrap" class="ft03">earnings; further shift away from par WL and risk-sharing products; a significant increase in high risk</p> <p style="position:absolute;top:241px;left:108px;white-space:nowrap" class="ft03">assets, losses and impairments relative to 2019 levels (e.g., GAAP 2019 YE HRA at 92%); company</p> <p style="position:absolute;top:261px;left:108px;white-space:nowrap" class="ft03">action level NAIC Risk Based Capital (RBC) ratio below 450% for more than a short time-period or a</p> <p style="position:absolute;top:280px;left:108px;white-space:nowrap" class="ft03">reduction in capital of more than 10% over a 12-month period; adjusted financial leverage of 20% or</p> <p style="position:absolute;top:300px;left:108px;white-space:nowrap" class="ft05">more; or earnings coverage consistently below 10x.<br/>AFFECTED RATINGS:<br/>The following ratings have been affirmed:<br/>New York Life Insurance Company: insurance financial strength at Aaa; surplus notes rating at Aa2</p> <p style="position:absolute;top:410px;left:108px;white-space:nowrap" class="ft05">(hyb); short-term insurance financial strength at Prime-1;<br/>New York Life Insurance &amp; Annuity Corporation: insurance financial strength at Aaa;<br/>New York Life Funding: funding agreement-backed senior secured MTN program at (P)Aaa;<br/>New York Life Global Funding: Sr Sec MTN program at (P)Aaa; Sr Sec debt rating at Aaa;<br/>New York Life Capital Corporation: backed short-term debt rating for commercial paper at Prime-1.<br/>Outlook Actions:<br/>..Issuer: New York Life Capital Corporation<br/>....Outlook, Remains negative<br/>..Issuer: New York Life Funding<br/>....Outlook, Remains negative<br/>..Issuer: New York Life Global Funding<br/>....Outlook, Remains negative<br/>..Issuer: New York Life Insurance &amp; Annuity Corporation<br/>....Outlook, Remains negative<br/>..Issuer: New York Life Insurance Company<br/>....Outlook, Remains negative<br/>New York Life, a mutual insurance company domiciled in New York, is based in New York City. As</p> <p style="position:absolute;top:915px;left:108px;white-space:nowrap" class="ft03">of September 30, 2020, New York Life reported consolidated statutory assets of approximately $360</p> <p style="position:absolute;top:934px;left:108px;white-space:nowrap" class="ft05">billion and consolidated statutory surplus of about $23 billion.<br/>Moody's insurance financial strength ratings are opinions of the ability of insurance companies to</p> <p style="position:absolute;top:984px;left:108px;white-space:nowrap" class="ft05">pay punctually senior policyholder claims and obligations.<br/>The principal methodology used in these ratings was Life Insurers Methodology published in</p> <p style="position:absolute;top:1034px;left:108px;white-space:nowrap" class="ft03">November 2019 and available at</p> <p style="position:absolute;top:1034px;left:335px;white-space:nowrap" class="ft06">&#160;https://www.moodys.com/researchdocumentcontentpage.aspx?</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/PR_1000003472003.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft06">docid=PBC_1187348</p> <p style="position:absolute;top:114px;left:256px;white-space:nowrap" class="ft03">. Alternatively, please see the Rating Methodologies page on www.moodys.com</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft04">for a copy of this methodology.<br/>REGULATORY DISCLOSURES<br/>For further specification of Moody’s key rating assumptions and sensitivity analysis, see</p> <p style="position:absolute;top:215px;left:108px;white-space:nowrap" class="ft03">the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure</p> <p style="position:absolute;top:234px;left:108px;white-space:nowrap" class="ft03">form. Moody’s Rating Symbols and Definitions can be found at:</p> <p style="position:absolute;top:234px;left:547px;white-space:nowrap" class="ft06">&#160;https://www.moodys.com/</p> <p style="position:absolute;top:254px;left:108px;white-space:nowrap" class="ft06">researchdocumentcontentpage.aspx?docid=PBC_79004</p> <p style="position:absolute;top:254px;left:503px;white-space:nowrap" class="ft03">.</p> <p style="position:absolute;top:284px;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:303px;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:323px;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:342px;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:362px;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:381px;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:401px;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:420px;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:440px;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:459px;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:479px;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:498px;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:518px;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:568px;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:587px;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:607px;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:626px;left:108px;white-space:nowrap" class="ft05">entity, Disclosure from rated entity.<br/>The ratings have been disclosed to the rated entities or their designated agent(s) and issued with no</p> <p style="position:absolute;top:676px;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:726px;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:776px;left:108px;white-space:nowrap" class="ft05">related rating outlook or rating review.<br/>Moody’s general principles for assessing environmental, social and governance (ESG) risks in our</p> <p style="position:absolute;top:825px;left:108px;white-space:nowrap" class="ft03">credit analysis can be found at&#160;</p> <p style="position:absolute;top:825px;left:325px;white-space:nowrap" class="ft06">https://www.moodys.com/researchdocumentcontentpage.aspx?</p> <p style="position:absolute;top:845px;left:108px;white-space:nowrap" class="ft06">docid=PBC_1243406</p> <p style="position:absolute;top:845px;left:257px;white-space:nowrap" class="ft03">.</p> <p style="position:absolute;top:875px;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:895px;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:914px;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:934px;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:953px;left:108px;white-space:nowrap" class="ft05">Moody’s office that issued the credit rating is available on www.moodys.com.<br/>The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s</p> <p style="position:absolute;top:1003px;left:108px;white-space:nowrap" class="ft03">affiliates outside the UK and is endorsed by Moody’s Investors Service Limited, One Canada</p> <p style="position:absolute;top:1023px;left:108px;white-space:nowrap" class="ft03">Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK.</p> </div> <!-- Page 4 --> <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="page4-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PR_1000003472004.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft03">Further information on the UK endorsement status and on the Moody’s office that issued the credit</p> <p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft05">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:183px;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:233px;left:108px;white-space:nowrap" class="ft05">disclosures for each credit rating.<br/>Laura Bazer</p> <p style="position:absolute;top:282px;left:108px;white-space:nowrap" class="ft03">VP-Sr Credit Officer</p> <p style="position:absolute;top:302px;left:108px;white-space:nowrap" class="ft03">Financial Institutions Group</p> <p style="position:absolute;top:321px;left:108px;white-space:nowrap" class="ft03">Moody's Investors Service, Inc.</p> <p style="position:absolute;top:341px;left:108px;white-space:nowrap" class="ft03">250 Greenwich Street</p> <p style="position:absolute;top:360px;left:108px;white-space:nowrap" class="ft03">New York, NY 10007</p> <p style="position:absolute;top:380px;left:108px;white-space:nowrap" class="ft03">U.S.A.</p> <p style="position:absolute;top:399px;left:108px;white-space:nowrap" class="ft03">JOURNALISTS: 1 <PhoneNo>212 553 0376</PhoneNo></p> <p style="position:absolute;top:419px;left:108px;white-space:nowrap" class="ft05">Client Service: 1 <PhoneNo>212 553 1653</PhoneNo><br/>Scott Robinson, CFA</p> <p style="position:absolute;top:469px;left:108px;white-space:nowrap" class="ft03">Associate Managing Director</p> <p style="position:absolute;top:488px;left:108px;white-space:nowrap" class="ft03">Financial Institutions Group</p> <p style="position:absolute;top:508px;left:108px;white-space:nowrap" class="ft03">JOURNALISTS: 1 <PhoneNo>212 553 0376</PhoneNo></p> <p style="position:absolute;top:527px;left:108px;white-space:nowrap" class="ft05">Client Service: 1 <PhoneNo>212 553 1653</PhoneNo><br/>Releasing Office:</p> <p style="position:absolute;top:577px;left:108px;white-space:nowrap" class="ft03">Moody's Investors Service, Inc.</p> <p style="position:absolute;top:597px;left:108px;white-space:nowrap" class="ft03">250 Greenwich Street</p> <p style="position:absolute;top:616px;left:108px;white-space:nowrap" class="ft03">New York, NY 10007</p> <p style="position:absolute;top:636px;left:108px;white-space:nowrap" class="ft03">U.S.A.</p> <p style="position:absolute;top:655px;left:108px;white-space:nowrap" class="ft03">JOURNALISTS: 1 <PhoneNo>212 553 0376</PhoneNo></p> <p style="position:absolute;top:675px;left:108px;white-space:nowrap" class="ft03">Client Service: 1 <PhoneNo>212 553 1653</PhoneNo></p> <p style="position:absolute;top:771px;left:108px;white-space:nowrap" class="ft03">© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their</p> <p style="position:absolute;top:790px;left:108px;white-space:nowrap" class="ft08">licensors and affiliates (collectively, “MOODY’S”). 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CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK,</b></p> <p style="position:absolute;top:1008px;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:1028px;left:108px;white-space:nowrap" class="ft07"><b>VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND</b></p> <p style="position:absolute;top:1047px;left:108px;white-space:nowrap" class="ft07"><b>OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS</b></p> </div> <!-- Page 5 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;} .ft09{font-size:13px;line-height:23px;font-family:Times;color:#0d0c0c;} .ft010{font-size:13px;line-height:23px;font-family:Times;color:#0d0c0c;} --> </style> <div id="page5-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PR_1000003472005.png" alt="background image"/> <p style="position:absolute;top:113px;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:133px;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:152px;left:108px;white-space:nowrap" class="ft07"><b>OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES.</b></p> <p style="position:absolute;top:172px;left:108px;white-space:nowrap" class="ft07"><b>MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO</b></p> <p style="position:absolute;top:191px;left:108px;white-space:nowrap" class="ft07"><b>NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S</b></p> <p style="position:absolute;top:211px;left:108px;white-space:nowrap" class="ft07"><b>CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND</b></p> <p style="position:absolute;top:230px;left:108px;white-space:nowrap" class="ft07"><b>DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR</b></p> <p style="position:absolute;top:250px;left:108px;white-space:nowrap" class="ft07"><b>SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND</b></p> <p style="position:absolute;top:269px;left:108px;white-space:nowrap" class="ft07"><b>PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY</b></p> <p style="position:absolute;top:289px;left:108px;white-space:nowrap" class="ft07"><b>PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND</b></p> <p style="position:absolute;top:308px;left:108px;white-space:nowrap" class="ft07"><b>OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND</b></p> <p style="position:absolute;top:328px;left:108px;white-space:nowrap" class="ft07"><b>UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY</b></p> <p style="position:absolute;top:347px;left:108px;white-space:nowrap" class="ft07"><b>AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE,</b></p> <p style="position:absolute;top:367px;left:108px;white-space:nowrap" class="ft09"><b>HOLDING, OR SALE.<br/></b>MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS</p> <p style="position:absolute;top:410px;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:429px;left:108px;white-space:nowrap" class="ft03">AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS,</p> <p style="position:absolute;top:449px;left:108px;white-space:nowrap" class="ft03">ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT</p> <p style="position:absolute;top:468px;left:108px;white-space:nowrap" class="ft03">DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER</p> <p style="position:absolute;top:488px;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:530px;left:108px;white-space:nowrap" class="ft03">LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR</p> <p style="position:absolute;top:550px;left:108px;white-space:nowrap" class="ft03">OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED,</p> <p style="position:absolute;top:569px;left:108px;white-space:nowrap" class="ft03">DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR</p> <p style="position:absolute;top:589px;left:108px;white-space:nowrap" class="ft03">ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY</p> <p style="position:absolute;top:608px;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:651px;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:670px;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:690px;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:732px;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:752px;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:771px;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:791px;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:810px;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:830px;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:849px;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:892px;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:911px;left:108px;white-space:nowrap" class="ft03">special, consequential, or incidental losses or damages whatsoever arising from or in connection</p> <p style="position:absolute;top:931px;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:950px;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:970px;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:989px;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:1009px;left:108px;white-space:nowrap" class="ft03">financial instrument is not the subject of a particular credit rating assigned by MOODY’S.</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_1000003472006.png" alt="background image"/> <p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft03">To the extent permitted by law, MOODY’S and its directors, officers, employees, agents,</p> <p style="position:absolute;top:133px;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:153px;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:172px;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:192px;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:211px;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:231px;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:250px;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:293px;left:108px;white-space:nowrap" class="ft03">COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF</p> <p style="position:absolute;top:312px;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:332px;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:374px;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:394px;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:413px;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:433px;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:452px;left:108px;white-space:nowrap" class="ft03">$1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies</p> <p style="position:absolute;top:472px;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:491px;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:511px;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:530px;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:550px;left:108px;white-space:nowrap" class="ft03">annually at&#160;</p> <p style="position:absolute;top:550px;left:188px;white-space:nowrap" class="ft06">www.moodys.com</p> <p style="position:absolute;top:550px;left:315px;white-space:nowrap" class="ft03">&#160;under the heading “Investor Relations — Corporate Governance —</p> <p style="position:absolute;top:569px;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:612px;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:631px;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:651px;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:670px;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:690px;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:709px;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:729px;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:748px;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:768px;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:787px;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:830px;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:849px;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:869px;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:888px;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:908px;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:927px;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> <p style="position:absolute;top:947px;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:966px;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:1009px;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:1028px;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> </div> <!-- Page 7 --> <style type="text/css"> <!-- p {margin: 0; padding: 0;}--> </style> <div id="page7-div" style="position:relative;width:918px;height:1188px;"> <img width="918" height="1188" src="http://mco.acquiremedia.com/images/PR_1000003472007.png" alt="background image"/> <p style="position:absolute;top:114px;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:133px;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:176px;left:108px;white-space:nowrap" class="ft03">requirements.</p> </div> </body> </html>