Credit Opinion: OTP Bank (Ukraine) Global Credit Research - 30 Aug Ratings. Parent: OTP Bank. Contacts. Key Indicators

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1 Credit Opinion: OTP Bank (Ukraine) Global Credit Research - 30 Aug 2010 Kyiv, Ukraine Ratings Category Moody's Rating Outlook Stable(m) Bank Deposits -Fgn Curr B3/NP Bank Deposits -Dom Curr Ba1/NP NSR Bank Deposits -Dom Curr Aa1.ua/-- Bank Financial Strength D- Parent: OTP Bank Outlook Rating(s) Under Review Bank Deposits *Baa1/*P-2 Bank Financial Strength D+ Senior Unsecured *Baa1 Subordinate *Baa2 Other Short Term **(P)P-2 * Placed under review for possible downgrade on July 23, 2010 ** Placed under review for possible downgrade on August 27, 2010 Contacts Analyst Phone Elena Redko/Moscow Yaroslav Sovgyra/Moscow Yves Lemay/London Yana Ruvinskaya/Moscow Key Indicators OTP Bank (Ukraine) [1] Avg. Total assets (US$ million) Shareholders' Equity (US$ million) Return on average assets Recurring earnings power [2] Net interest margin Cost/income ratio (%) [3] Problem loans % gross loans Tier 1 Ratio (%) [1] As of December 31. [2] Preprovision income % average assets. [3] Non-Interest Expense % Operating Income. Opinion SUMMARY RATING RATIONALE Moody's assigns a bank financial strength rating (BFSR) of D- (negative outlook) to OTP Bank Ukraine (OTP), which translates into a Ba3 Baseline Credit Assessment (BCA). The BFSR is constrained by the challenging credit conditions in Ukraine, still heavy pressure on the bank's asset quality and thus capital, and by its limited branch network. However, the rating also reflects the bank's strong risk management processes, which are based on those of its predecessor (Raiffeisenbank Ukraine, a former subsidiary of Raiffeisen Zentralbank Oesterreich AG) and the best practices of the parent - OTP Bank (Hungary), as well as its visible franchise as one of the top ten banks in the country, and its solid liquidity profile and capital adequacy, which benefit from parental support. OTP's Ba1/NP global local currency (GLC) deposit ratings reflect (i) the BCA of Ba3; (ii) our assessment of a very high probability of parental support from the bank's 100% owner, OTP Bank (Hungary), which has a Baa3 BCA; and (iii) our assessment of a low probability of systemic support, given OTP's importance to the national financial system as a top ten bank in Ukraine. There is thus a two-notch uplift for the long-term

2 support, given OTP's importance to the national financial system as a top ten bank in Ukraine. There is thus a two-notch uplift for the long-term GLC deposit rating from the BCA. OTP's long-term foreign currency deposit and debt ratings also carry a negative outlook in line with the outlook on the sovereign ceiling. The bank's other long-term ratings carry a stable outlook. The bank's GLC deposit ratings are constrained by the local currency country ceiling for bank deposits, thus limiting the rating uplift resulting from parental and systemic support. OTP's long-term foreign currency deposit rating of B3 is constrained by Ukraine's foreign currency deposit ceiling. Credit Strengths - Support from the parent underpins the ratings - Solid franchise as a top ten Ukrainian bank with notable market shares - Corporate governance standards and risk management processes - Adequate liquidity profile - Experienced management team Credit Challenges - Still challenging credit conditions in Ukraine exerts pressure on the bank's asset quality, profitability and capitalisation - High single-name concentration in the loan book - Non-equity funding is excessively dependent on the parent - Relatively small branch network Rating Outlook OTP's BFSR carries a negative outlook, which is driven by Moody's concerns about the potential impact of the enduring economic downturn in Ukraine on OTP's asset quality and financial performance, which is likely to exert further negative pressure on the bank's capital levels. OTP's long-term foreign currency deposit and debt ratings also carry a negative outlook in line with the outlook on the sovereign ceiling. The bank's other long-term ratings carry a stable outlook. What Could Change the Rating - Up Moody's does not anticipate a BFSR upgrade in the near future. In the longer term, the BFSR would likely be upgraded in the event of (i) a strengthening of capital adequacy measures on the back of an improved internal capacity to generate capital; (ii) a strengthening of the bank's franchise (by the further implementation of new products, increasing the number of products per customer, improving customer reach and maintaining or perhaps increasing market shares) without sacrificing profitability, asset quality or liquidity; (iii) a reduction in concentrations in the loan book in relation to equity and pre-provision income; (iv) diversification of the funding base beyond funding provided by the parent, and/or (v) further enhancements in risk management systems and a more cautious approach to risks. The bank's foreign currency deposit ratings are constrained by the country ceiling for Ukraine and cannot be upgraded unless the country ceiling is raised. What Could Change the Rating - Down The bank's BFSR could be downgraded if it fails to secure additional capital injections sufficient to absorb potential credit losses in 2010 (mirroring challenging credit conditions in Ukraine). The rating could also be downgraded as a result of (i) deterioration of asset quality beyond our current expectations, and (ii) pressure on liquidity if deposit outflow from the Ukrainian banking system resumes. A downgrade of OTP's GLC deposit ratings could occur if our assessment of the probability of external support were to diminish. Recent Results and Company Events As of 31 December 2009 OTP reported total IFRS assets of UAH30.3 billion (US$3.8 billion) and net loss of UAH1.8 billion (US$230 million). In 1H2010 the bank demonstrated modest recovery of earning generation capacity and reported net income UAH55 million (US$7 million) under management IFRS accounts. In December 2009 the bank received US$30 million of subordinated loan from its parent. DETAILED RATING CONSIDERATIONS Detailed considerations for OTP's currently assigned ratings are as follows: Bank Financial Strength Rating Moody's assigns a D- BFSR to OTP. The rating is underpinned by the bank's solid franchise in Ukraine and its cautious approach to market risks, its high single-name borrower concentrations in comparison with pre-provision income, and heavy pressure on asset quality and thus on profitability and capital adequacy. Other credit challenges include a heavy reliance on its parent for funding in conjunction with a growing dependence on market funds and a less wide-spread branch network coverage than that of its local peers. As a point of reference, the assigned BFSR is line with the outcome of Moody's bank financial strength scorecard. Qualitative Factors (70%)

3 Factor 1: Franchise Value OTP is the eighth-largest bank in Ukraine in terms of total assets (market share of 3.2%), 11th by corporate loans (2.5%) and sixth by retail loans (6.7%) at end-q (in accordance with National Bank of Ukraine statistics). The bank has a nationwide network of 26 regional outlets, 176 outlets and 2 representative offices in all major regions of Ukraine with more entrenched positions in Eastern and Southern regions as well as in its home (Kyiv) region. The branch network enlargement was completed by YE2008 and we only expect OTP to pursue organic expansion in selective regions; the bank will continue to focus on process optimisation and efficiency of the existing network in 2010, while more active regional development would depend on a more favourable operating environment. On the one hand, OTP's franchise value has strengthened considerably in recent years as the bank has diversified away from a reliance on large corporates in its lending activities and is strengthening its positions in relatively new segments (in the Ukrainian context) such as SME and retail. On the other hand, the bank's franchise is somewhat limited on the liability side as OTP considers its parent to be one of the main contributors of its funding. This results in a narrowing of the core deposit base although on slight growing trend during 2009 and 1H2010. Due to changes in the operating environment, the bank currently focuses on managing the quality of its assets rather than growth in loans and diversification of products, and we do not expect these objectives to change in However, the strategy is in line with targets set by other market participants and we do not see an opportunity for material change in the market shares of core players, including OTP. In our opinion, an overall score of D+ for franchise value is an appropriate measure of the bank's relatively high market shares and limited branch network, but also good product diversification. Factor 2: Risk Positioning OTP's supervisory board consists exclusively of its owner's representatives and members that are not fully independent from the parent; this is mitigated somewhat by the bank's close integration with its parent, which has relatively advanced corporate governance standards in place. The bank's conservative risk management and rigorous underwriting standards were inherited as part of the business approach of Raiffeisen International, the former parent of the bank, and are implemented by an experienced professional management team. However, the risk management standards did not take into account the volatility of the operating environment and the instability of the local currency, therefore the bank's loan book performance during the global financial crisis has been in line with the weak market average, with major problems attributable to FX-denominated loans, especially mortgages. OTP's loan book is somewhat concentrated: the 20 largest borrower exposures accounted for close to 270% of Tier 1 capital at the end of 2009, and the top three borrowers represented 75% of Tier 1 capital, rendering loan book quality susceptible to the performance of a few customers. This risk is mitigated to some extent by the fact that these names are the most sophisticated economic groups (in the Ukrainian context) with interests that are, generally, diversified. However, we also understand that borrowers' credit quality is far from investment grade. The bank's funding is heavily concentrated, with financing from the parent (including subordinated debt) representing close to 69% of total nonequity funding at 31 December 2009, which - in a period of market distress - we usually consider to be a relatively stable source of funding (as opposed to open market funding). At the same time, the majority of the bank's funding is denominated in foreign currency, which renders the bank's performance vulnerable to FX risks, especially in Ukraine, where there is still some pressure on the local currency rate. The bank's market risk appetite - as measured by the potential losses on trading and non-trading books due to major market movements - is modest, as its exposures are limited to fixed-income instruments (as opposed to shares), which include T-bills and bonds of Ukrainian blue - chip companies. The bank's strategy limits its investments to fixed-income instruments, and does not permit investments in shares. OTP releases full-scope IFRS financials on an annual basis. However, we believe that the level of public disclosure could be improved to include more relevant information - especially in the area of risk management. OTP's D score for risk positioning reflects (i) the high level of single-name concentration in the loan book and its high dependence on its parent for funding in line with the very narrow deposit base, (ii) the very rapid pace of growth in the bank's loan book, which is associated with higher credit risks, and (iii) FX-related risks. The score also reflects the strong risk management framework, as shown by the rigid credit underwriting criteria (and management information systems in line with the standards maintained by OTP Bank (Hungary)). In our view, a neutral trend for the bank's risk positioning is appropriate, given its emphasis on organic expansion in selective regions in the years ahead. Factor 3: Regulatory Environment For a discussion of the regulatory environment, see Moody's latest Banking System Outlook on Ukraine, published in November Factor 4: Operating Environment This factor is common to all Ukrainian banks. Moody's assigns an E+ score for the overall operating environment. For a discussion of the operating environment, see Moody's latest Banking System Outlook on Ukraine, published in November Quantitative Factors (30%) Factor 5: Profitability Trend: Weakening OTP reported a net loss of UAH1.8 billion for 2009, driven by the rapid pace of growth in provisioning; the latter increased from 3.1% at YE2008 to 15.1% at YE2009. At the same time, the bank's recurring income generation capacity has not been significantly damaged and has been supported by a healthy net interest margin of 7.8%. The net interest margin will likely be preserved at 5-7% going forward, as the bank relies on

4 reasonably priced funding, which represents a blend of cross-border funding dominated by parental deposits and low-cost customer deposits, thereby channelling those funds into higher-yield retail loans and lower-yield corporate loans. However, we do not expect an imminent recovery in the bank's profitability as the still challenging credit conditions is exerting further pressure on its asset quality and, thus, its level of provisions. The bank's C score does not fully capture our concerns with regard to the future earnings stream, thus we see a weakening trend for this factor. Factor 6: Liquidity On the one hand, the presence of a financially strong parent confers an advantage to OTP as it provides the bank with access to longer-term, predictable and lower-cost international financing. On the other hand, the dependence on its parent (which provided up to 69% of non-equity funding at YE2009) induces concentration risks. The disruption risk is mitigated by the strategic link of its parent with its Ukrainian subsidiary. Given the stable nature of the parent's funding, we are inclined to classify this type of funding as deposits, resulting in an adjusted loan-to-deposit ratio of 102% at YE2009, thereby demonstrating a low dependence on market funding. Customer accounts represented around 30% of non-equity funding as at YE 2009 (YE2008: 23%) and demonstrated stability during the systemwide loss of confidence in Ukraine - OTP lost only 2.7% of its deposits in Q3 2008, which were fully recovered by YE2009. The bank's liquidity management is reasonably well-developed, enabling it to monitor its liquidity position on an ongoing basis (its treasury reports are detailed and are produced and used by management regularly). As part of liquidity management, internal limits (such as the net loans/customer deposits ratio) are excessive, in Moody's view, given the bank's reliance on its parent for funding, while limited volume of new lending supports the bank's liquidity buffer. The current score of D- for liquidity takes into account the bank's high dependence on its parent for funding. Moody's view favourably a diversification of the bank's funding base as well as the elimination of negative liquidity gaps (based on contractual maturities) within the one-year liquidity bucket (which was the case on a historical basis). Factor 7: Capital Adequacy Trend: Weakening The bank's internal capital generation has historically been moderate and it has to resort to periodic capital injections from its shareholder. OTP's capitalisation is adequate, with the equity-to-assets ratio standing at 12.8% at 31 December 2009 up from 9.4% a year before, supported by timely capital injections from the parent. The bank has also received Tier 2 support from the shareholder and its total capital-to-assets ratio stood at an even more comfortable 18.7% as of the end of The bank will likely remain reliant on its parent for capital replenishment. In addition to regular Tier 1 and Tier 2 capital injections, the bank received a guarantee from the parent covering over UAH2.2 billion problem loans (over US$280 million). Under the terms of the guarantee, the parent committed to purchase in full the outstanding amount of problem loans, which were subject to the guarantee, in January The instrument was accounted as supplementary capital balanced by other receivables. Total capital adequacy ratio (in connection to risk-weighted assets) stood at healthy 23% as at YE 2009, growing from 16% as at YE2008, while the Tier 1 capital adequacy ratio (CAR) was reported at a moderate 11% at YE2009 (YE2008: 12%) due to the high share of Tier 2 instruments in the bank's equity composition. The unadjusted A score for capitalisation has been lowered to reflect the bank's inability to generate sufficient economic capital on a standalone basis to cover expected losses from deteriorating assets and its constant need to resort to additional capital. Factor 8: Efficiency The bank's impressive efficiency has been maintained thanks to its low cost base. The key efficiency ratios were historically close to 3% for the cost-to-average assets ratio and less than 40% for the cost-to-income ratio (for the latter ratio, we use an average of figures). Going forward, the bank's cost base will grow only moderately, as a result of inflation. The branch network enlargement was completed by YE2008; the bank will continue to focus on the process optimisation and efficiency of the existing network in 2010, while more active regional development would depend on a more favourable operating environment. OTP has introduced certain cost-cutting measures such as lowering of occupation expenses in line with the marked decline in real estate prices. However, the target is to optimise costs (previously overheated by the booming economy) rather than to shrink the business. These assumptions are reflected in A score for efficiency with a neutral trend. Factor 9: Asset Quality Trend: Weakening OTP's problem loans (defined as 90+ days overdue) reported under IFRS stood at 20% of the bank's loan portfolio as at YE2009, while over 40% of the portfolio was restructured. The level of loan loss provisions stood at a lower-than-expected loss level (problem loans adjusted for expected recovery) of 15.1% at 31 December In common with other Ukrainian banks, the major contributor to OTP's problem and restructured loans is foreign currency lending: approximately 83%of the bank's loan book was denominated in foreign currency as at YE2009 (YE2008: 90%). Due to the strong devaluation of the Ukrainian hryvnia in the latter months of 2008 and at the beginning of 2009, customers that have borrowed in foreign currency face a relative increase in their debt-servicing amount, and such loans have therefore performed worse than the overall loan book. In 2009 the bank received a parental guarantee covering over UAH2.2 billion of overdue loans (less than 30% of 90+ days overdue loans), the

5 parent irrevocably committed to purchase any problem loan covered by the guarantee and outstanding as of 10 January This instrument confers greater comfort to the bank in terms of problem loans recovery, and further smoothes any pressure on profitability and capital; however, this does not solve the issue related to under provisioning. We expect a further increase in problem loans in 2010, albeit at a pace of growth lower than that of 2009 given the still challenging credit conditions in Ukraine, and thus, OTP will have to increase its problem loans coverage, which is likely to have further significant negative effect on its profitability and capital. The bank scores E for this factor. Global Local Currency Deposit Rating (Joint Default Analysis) Moody's assigns GLC deposit ratings of Ba1/NP to OTP. The ratings are supported not only by the bank's BCA of Ba3, but also by Moody's assessment of a very high probability of parental support in the event of need from OTP Bank (Hungary), which has a BCA of Baa3, and a low probability of systemic support (Ukraine's local currency deposit ceiling is Ba1). This results in two-notch uplift for the long-term GLC deposit rating from the BCA of Ba3. Moody's assessment of a very high probability of parental support is based on (i) the management control of OTP by OTP Bank (Hungary), (ii) OTP's name association with the OTP Bank name and (iii) the strong strategic fit of OTP within OTP Bank group (among other things, OTP is its parent's second-largest subsidiary, out of eight, accounting for a material share of the parent's consolidated assets and loan book) and hence the low risk that OTP would be disposed of by its parent. The low probability of systemic support reflects the bank's importance to the Ukrainian financial system based on its considerable market shares as a top ten Ukrainian bank. The bank's GLC deposit ratings are constrained by the local currency country ceiling for bank deposits, thus limiting the rating uplift due to parental and systemic support. National Scale Rating Moody's rates OTP Aa1.ua on Ukraine's National Scale. Foreign Currency Deposit Rating The B3/NP foreign currency deposit ratings are constrained by the B3/NP foreign currency deposit ceiling for Ukraine (the ratings carry a negative outlook in line with the negative outlook on the country ceiling). ABOUT MOODY'S BANK RATINGS Bank Financial Strength Rating Moody's Bank Financial Strength Ratings (BFSRs) represent Moody's opinion of a bank's intrinsic safety and soundness and, as such, exclude certain external credit risks and credit support elements that are addressed by Moody's Bank Deposit Ratings. BFSRs do not take into account the probability that the bank will receive such external support, nor do they address risks arising from sovereign actions that may interfere with a bank's ability to honor its domestic or foreign currency obligations. Factors considered in the assignment of BFSRs include bank-specific elements such as financial fundamentals, franchise value, and business and asset diversification. Although BFSRs exclude the external factors specified above, they do take into account other risk factors in the bank's operating environment, including the strength and prospective performance of the economy, as well as the structure and relative fragility of the financial system, and the quality of banking regulation and supervision. Global Local Currency Deposit Rating A deposit rating, as an opinion of relative credit risk, incorporates the BFSR as well as Moody's opinion of any external support. Specifically, Moody's Bank Deposit Ratings are opinions of a bank's ability to repay punctually its deposit obligations. As such, they are intended to incorporate those aspects of credit risk relevant to the prospective payment performance of rated banks with respect to deposit obligations, which includes: intrinsic financial strength, sovereign transfer risk (in the case of foreign currency deposit ratings), and both implicit and explicit external support elements. Moody's Bank Deposit Ratings do not take into account the benefit of deposit insurance schemes which make payments to depositors, but they do recognize the potential support from schemes that may provide assistance to banks directly. According to Moody's joint default analysis (JDA) methodology, the global local currency deposit rating of a bank is determined by the incorporation of external elements of support into the bank's Baseline Credit Assessment. In calculating the Global Local Currency Deposit rating for a bank, the JDA methodology also factors in the rating of the support provider, in the form of the local currency deposit ceiling for a country, Moody's assessment of the probability of systemic support for the bank in the event of a stress situation and the degree of dependence between the issuer rating and the Local Currency Deposit Ceiling. National Scale Rating National scale ratings are intended primarily for use by domestic investors and are not comparable to Moody's globally applicable ratings; rather they address relative credit risk within a given country. A Aaa rating on Moody's National Scale indicates an issuer or issue with the strongest creditworthiness and the lowest likelihood of credit loss relative to other domestic issuers. National Scale Ratings, therefore, rank domestic issuers relative to each other and not relative to absolute default risks. National ratings isolate systemic risks; they do not address loss expectation associated with systemic events that could affect all issuers, even those that receive the highest ratings on the National Scale. Foreign Currency Deposit Rating Moody's ratings on foreign currency bank obligations derive from the bank's local currency rating for the same class of obligation. The implementation of JDA for banks can lead to high local currency ratings for certain banks, which could also produce high foreign currency ratings. Nevertheless, it should be noted that foreign currency deposit ratings are in all cases constrained by the country ceiling for foreign currency bank deposits. This may result in the assignment of a different, and typically lower, rating for the foreign currency deposits relative to the bank's rating for local currency obligations.

6 Foreign currency debt rating Foreign currency debt ratings are derived from the bank's local currency debt rating. In a similar way to foreign currency deposit ratings, foreign currency debt ratings may also be constrained by the country ceiling for foreign currency bonds and notes; however, in some cases the ratings on foreign currency debt obligations may be allowed to pierce the foreign currency ceiling. A particular mix of rating factors are taken into consideration in order to assess whether a foreign currency bond rating pierces the country ceiling. They include the issuer's global local currency rating, the foreign currency government bond rating, the country ceiling for bonds and the debt's eligibility to pierce that ceiling. About Moody's Bank Financial Strength Scorecard Moody's bank financial strength model (see scorecard below) is a strategic input in the assessment of the financial strength of a bank, used as a key tool by Moody's analysts to ensure consistency of approach across banks and regions. The model output and the individual scores are discussed in rating committees and may be adjusted up or down to reflect conditions specific to each rated entity. About Moody's Bank Financial Strength Scorecard Moody's bank financial strength model (see scorecard below) is a strategic input in the assessment of the financial strength of a bank, used as a key tool by Moody's analysts to ensure consistency of approach across banks and regions. The model output and the individual scores are discussed in rating committees and may be adjusted up or down to reflect conditions specific to each rated entity. Rating Factors OTP Bank (Ukraine) Rating Factors [1] A B C D E Total Score Trend Qualitative Factors (70%) D- Factor: Franchise Value D+ Neutral Market Share and Sustainability x Geographical Diversification x Earnings Stability x Earnings Diversification [2] Factor: Risk Positioning D Neutral Corporate Governance [2] - Ownership and Organizational Complexity - Key Man Risk - Insider and Related-Party Risks Controls and Risk Management x - Risk Management x - Controls x Financial Reporting Transparency x - Global Comparability x - Frequency and Timeliness x - Quality of Financial Information x Credit Risk Concentration x - Borrower Concentration x - Industry Concentration x Liquidity Management x Market Risk Appetite x Factor: Operating Environment E+ Neutral Economic Stability x Integrity and Corruption x Legal System x Financial Factors (30%) D+ Factor: Profitability C Weakening PPP % Avg RWA - Basel I 6.75% Net Income % Avg RWA - Basel I -0.74% Factor: Liquidity D- Neutral (Mkt funds-liquid Assets) % Total Assets 54.46% Liquidity Management x Factor: Capital Adequacy A Weakening Tier 1 ratio (%) - Basel I 11.33% Tangible Common Equity / RWA - Basel I 11.33% Factor: Efficiency A Neutral Cost/income ratio 37.69% Factor: Asset Quality E Weakening

7 Problem Loans % Gross Loans 30.81% Problem Loans % (Equity + LLR) % Lowest Combined Score (9%) E Economic Insolvency Override D- Aggregate Score D- Assigned BFSR D- [1] - Where dashes are shown for a particular factor (or sub-factor), the score is based on non public information [2] - A blank score under Earnings diversification or Corporate Governance indicates the risk is neutral 2010 Moody s Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC.'S ("MIS") CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS 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. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS DO NOT CONSTITUTE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS ARE NOT RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. CREDIT RATINGS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MIS ISSUES ITS CREDIT RATINGS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. 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. 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. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. MIS, 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 MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at under the heading "Shareholder Relations Corporate Governance Director and Shareholder Affiliation Policy."

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