Rating Action: Moody's affirms KBC Group, KBC Bank and KBC Bank Ireland's ratings and changes outlook on their long-term ratings to positive

Similar documents
Rating Action: Moody's upgrades Bank of Ireland and changes Bank of Ireland UK's outlook to positive

Rating Action: Moody's affirms BIL's A2 senior unsecured rating and changes outlook to stable 07 May 2018

Rating Action: Moody's upgrades Belfius Bank's senior unsecured and deposit ratings to A2 with a positive outlook

Rating Action: Moody's confirms Credit Europe Bank NV's Ba2 deposit rating and affirms Demir-Halk Bank NV's Ba1 deposit rating

Rating Action: Moody's changes outlook to positive on all ratings of Allied Irish Banks and assigns (P) Ba2 rating to holding company senior programme

Rating Action: Moody's upgrades Permanent tsb's deposit and senior unsecured ratings; outlook stable Global Credit Research - 08 May 2015

Rating Action: Moody's assigns Counterparty Risk Rating to FCA Bank

Standalone BCA upgraded to b1 from b3 for Ulster Bank Limited and to b2 from b3 for Ulster Bank Ireland Limited

Rating Action: Moody's changes the outlook on FCA Bank's senior debt rating to positive from stable

Rating Action: Moody's places debt and long-term deposit ratings of Credit Europe Bank N.V. on review for upgrade

Rating Action: Moody's downgrades Lowe's unsecured ratings to Baa1; P-2 commercial paper rating affirmed 12 Dec 2018

Rating Action: Moody's upgrades BAWAG's ratings to A2; outlook positive

Rating Action: Moody's assigns Counterparty Risk Ratings to three Sri Lankan banks 18 Jun 2018

Rating Action: Moody's changes outlook of Central Bank of India and Indian Overseas Bank to positive from stable

Rating Action: Moody's affirms Banco Sabadell's ratings, outlook changed to stable from positive 19 Sep 2018

Rating Action: Moody's upgrades DVB Bank's debt to Aa3 from Baa1 and deposits to Aa1 from A2

Rating Action: Moody's downgrades Banca Carige S.p.A. and places ratings under review for downgrade 07 Aug 2018

Rating Action: Moody's affirms Volvofinans Bank's A3 rating; stable outlook 26 Feb 2019

Rating Action: Moody's upgrades the ratings of Philippine National Bank and Rizal Commercial Bank Global Credit Research - 23 Nov 2017

Rating Action: Moody's changes outlook on Bank Zachodni WBK S.A.'s ratings to positive Global Credit Research - 29 Jan 2018

Rating Action: Moody's assigns definitive ratings to Lloyds' non-ring-fenced banks LBCM and LBIL

Rating Action: Moody's affirms Berner Kantonalbank's Aa1 deposit and A1 senior unsecured debt ratings

Rating Action: Moody's downgrades the ratings of The Royal Bank of Scotland plc and upgrades the ratings of National Westminster Bank Plc.

Rating Action: Moody's downgrades long-term deposit and senior unsecured debt ratings of Danske Bank to A2 and maintains a negative outlook

Rating Action: Moody's upgrades several Irish mortgage covered bond ratings; actions conclude review

Rating Action: Moody's reviews NORD/LB Luxembourg S.A. - Public-Sector Covered Bonds, direction uncertain 19 Dec 2018

Rating Action: Moody's upgrades NORD/LB's Fuerstenberg preference shares to Caa1(hyb) Global Credit Research - 18 Apr 2018

Rating Action: Moody's upgrades deposit ratings of Landesbank Berlin and Berlin Hyp to Aa2, changes outlook to stable

Rating Action: Moody's downgrades ENGIE to A2; stable outlook Global Credit Research - 27 Apr 2016

Rating Action: Moody's affirms Intrum Justitia's Ba2 corporate family rating; outlook changed to stable Global Credit Research - 19 Apr 2018

Rating Action: Moody's upgrades Banco Santander's junior senior unsecured debt ratings to Baa1 from Baa2

Rating Action: Moody's Changes Sparebanken Vest's Rating Outlook to Stable From Negative

Rating Action: Moody's affirms Baa3 senior unsecured debt ratings of ICICI Bank's Bahrain branch Global Credit Research - 17 Aug 2017

Rating Action: Moody's reviews Depfa ACS Bank's public sector covered bonds for downgrade Global Credit Research - 14 Sep 2016

Rating Action: Moody's downgrades senior unsecured debt instruments of 14 German banks following change in bank insolvency law

Rating Action: Moody's confirms ratings of six financial institutions in Kazakhstan; concludes review

Rating Action: Moody's changes Hella's outlook to positive; affirms ratings Global Credit Research - 31 Aug 2017

Rating Action: Moody's affirms Aa1 issuer and bond ratings of the International Finance Facility for Immunisation (IFFIm) with a stable outlook

Rating Action: Moody's confirms Promsvyazbank's ratings at B2; developing outlook

Rating Action: Moody's takes rating actions on Irish mortgage covered bonds Global Credit Research - 26 Sep 2016

Rating Action: Moody's assigns Counterparty Risk Ratings to 14 Austrian banks

Rating Action: Moody's affirms 22 German banks' senior unsecured debt ratings; changes 16 outlooks to negative

Rating Action: Moody's downgrades Coty's CFR to Ba3; outlook stable Global Credit Research - 20 Mar 2018

Rating Action: Moody's Upgrades the City of Sacramento, CA's Lease Revenue Bonds to A1; Confirms Ser and Ser. 1993A at A2; outlook is stable

Rating Action: Moody's upgrades Kommunalkredit Austria AG's public-sector covered bonds Global Credit Research - 25 Jul 2017

Rating Action: Moody's changes the outlook to negative on three Infrastructure Issuers operating in Colombia

Rating Action: Moody's concludes review on SC Citadele Banka and Siauliu Bankas

Global Credit Research - 19 Apr 2018

Policy for Designating and Assigning Unsolicited Credit Ratings

Rating Action: Moody's affirms the Baa2 financial strength rating on VIVAT NV's operating subsidiaries. Outlook remains stable

OECD Workshop on Data Collection

Rating Action: Moody's upgrades mortgage covered bonds issued by AIB Mortgage Bank and EBS Mortgage Finance Global Credit Research - 29 Nov 2016

Rating Action: Moody's changes outlooks on ratings of 14 Russian financial institutions to stable from negative

Rating Action: Moody's affirms HSH Nordbank's Baa3/Prime-3 debt and deposit ratings

Rating Action: Moody's affirms Land and Agricultural Development Bank's Baa3 rating; changes outlook to negative from stable

Rating Action: Moody's changes Colonial's outlook to negative from stable following tender offer for Axiare Global Credit Research - 14 Nov 2017

Rating Action: Moody's assigns (P)A1 senior unsecured rating to SpareBank 1 Ostlandet's jointly-owned EMTN program

Rating Action: Moody's changes rating outlook for Black Sea Trade and Development Bank to stable from negative Global Credit Research - 30 Sep 2016

Rating Action: Moody's reviews covered bonds issued by Hypo NOE, Hypo Tirol and Heta AR for upgrade Global Credit Research - 25 May 2016

Rating Action: Moody's confirms Banco Popolare's Ba3 deposit and senior debt rating; outlook stable

Rating Action: Moody's upgrades Gasunie to A1 from A2; stable outlook 08 Aug 2018

Rating Action: Moody's affirms JAB Holding's Baa1 Issuer rating; outlook stable Global Credit Research - 30 Jan 2018

Rating Action: Moody's changes outlook on Telekom Austria's ratings to positive Global Credit Research - 05 Jul 2017

Policy for Designating and Assigning Unsolicited Credit Ratings in the European Union

Rating Action: Moody's downgrades the ratings of four Italian utilities 23 Oct 2018

Rating Action: Moody's upgrade Equinor's rating to Aa2 and BCA to a1; stable outlook 09 Aug 2018

Rating Action: Moody's downgrades Bharti's senior unsecured notes to Ba1 and assigns a Ba1 CFR; outlook negative 05 Feb 2019

Credit Opinion: Banca Sella Holding

Rating Action: Moody's assigns an A1 insurance financial strength rating to CNP Assurances with a stable outlook 06 Jun 2018

Rating Action: Moody's upgrades Blue Racer's senior notes to B2, rates new notes

State Outlook: Debt Affordability. NCSL Conference Gail Sussman, Managing Director

Rating Action: Moody's downgrades Coty's CFR to B1; outlook negative 26 Nov 2018

CIMIC GROUP UPGRADED TO Baa2, OUTLOOK STABLE, BY MOODY'S INVESTORS SERVICE

business cultures. LIQUIDITY PROFILE Moody's considers Lafarge's liquidity profile on a stand-alone basis to be good for the next 12 months, largely

Rating Action: Moody's upgrades Stora Enso to Baa3; stable outlook 01 Nov 2018

Rating Action: Moody's upgrades the MBIA group; National Public Finance at Baa1 and MBIA Corp. at B3 Global Credit Research - 21 May 2013

Rating Action: Moody's Affirms Baa2 Debt and A3 Deposit Ratings of Deutsche Bank AG. Outlook Stable

Rating Action: Moody's upgrades Peruvian banks

Rating Action: Moody's changes outlook on AEGON N.V. (A3 senior) back to stable from negative Global Credit Research - 20 Dec 2017

Rating Action: Moody's assigns Aa3 to West Virginia SBA's $44.4M Capital Improvement Ref. Rev. Bonds, Ser Global Credit Research - 08 Sep 2017

Rating Action: Moody's confirms RWE's Baa3/Ba2 ratings, stable outlook 17 May 2018

Mongolian Banking System

Rating Action: Moody's assigns A3 issuer rating to Nidec Corporation; outlook stable Global Credit Research - 31 Jan 2018

Rating Action: Moody's downgrades MBIA Inc. and National Public Finance Guarantee Corp. (IFS to Baa2); MBIA Insurance Corp.

Rating Action: Moody's assigns Counterparty Risk Ratings to 26 German banks

Rating Action: Moody's assigns Aa3 to Trinity Health Credit Group's (MI) Ser bonds; outlook revised to stable

Rating Action: Moody's assigns Aa3/Prime-1 issuer ratings to the Departement de L'Eure; stable outlook Global Credit Research - 07 Apr 2016

Rating Action: Moody's assigns provisional (P)Aaa to Belfius Bank's public sector covered bonds

Rating Action: Moody's confirms the Baa3 issuer ratings of DBSA, IDC and Land Bank; stable outlook

Rating Action: Moody's upgrades Santander Consumer Finance's deposit ratings to Baa1; maintains stable outlook

Rating Action: Moody's affirms Aaa IFS rating of New York Life; stable outlook Global Credit Research - 27 Jul 2017

Rating Action: Moody's upgrades ratings of 15 European covered bonds following methodology update

Rating Action: Moody's assigns A2 to 2016B & C Senior Bonds of Central Florida Expressway Auth. (CFX), FL; Outlook positive

Rating Action: Moody's downgrades South Carolina Public Service Authority revenue bonds; rating outlook negative

ABN AMRO Bank N.V. Q1 2018: Higher impairment offset revenue growth. ISSUER COMMENT 16 May Summary opinion

Rating Action: Moody's upgrades Yanlord to Ba2; outlook stable Global Credit Research - 25 Apr 2017

Global Credit Research - 24 Jul 2017

Rating Action: Moody's assigns Caa3 Issuer Rating to US Virgin Islands; lowers ratings on four liens of Matching Fund Revenue Bonds

Rating Action: Moody's downgrades DIA's ratings to B2; negative outlook 22 Nov 2018

Rating Action: Moody's affirms MGCCT's Baa1 ratings on acquisition announcement; outlook stable Global Credit Research - 02 Apr 2018

Transcription:

Rating Action: Moody's affirms KBC Group, KBC Bank and KBC Bank Ireland's ratings and changes outlook on their long-term ratings to positive 19 Nov 2018 Paris, November 19, 2018 -- Moody's Investors Service ("Moody's") today affirmed the Aa3 long-term depositrating of KBC Bank N.V. (KBC Bank) and the Baa1 long-term senior unsecured debt and issuer ratings of KBC Group N.V. (KBC Group). The rating agency also affirmed the A1 backed senior unsecured debt rating of KBC IFIMA S.A. (IFIMA), as well as KBC Bank's backed junior subordinated debt rating and KBC Group's noncumulative preferred stock rating of Baa3(hyb) and Ba1(hyb), respectively. KBC Bank's short-term deposit ratings were also affirmed at Prime-1 and KBC Group's Deposit Note/CD programme was affirmed at Prime-2, as were the bank's Baseline Credit Assessment (BCA) and Adjusted BCA of baa1. Finally, the rating agency also affirmed the bank's long-term and short-term Counterparty Risk Rating (CRR) of Aa3 and Prime-1, as well as its Counterparty Risk (CR) Assessment of Aa3(cr) and Prime-1(cr). The outlooks on long-term deposit, issuer and senior unsecured debt ratings, where applicable, were changed to positive from stable. As part of the same action, Moody's also upgraded the BCA of KBC Bank Ireland PLC (KBCI) to b2 from b3, and affirmed its adjusted BCA of ba1, its long-term deposit rating of Ba1 and short-term deposit rating of Not Prime. The rating agency also affirmed KBCI's long-term CRR of Baa2, short-term CRR of Prime-2 and CR Assessment of Baa1(cr)/Prime-2(cr). As for its parent KBC Bank, Moody's changed the outlook on KBCI's longterm deposit rating to positive from stable. A list of all affected ratings is provided towards the end of this press release. RATINGS RATIONALE 1. KBCI The upgrade of KBCI's BCA primarily reflects the bank's improved asset risk profile following a decrease in its stock of problem loans. On 9 August 2018, the bank announced an agreement to sell a problem loan portfolio with a par value of 1.9 billion, which will bring the bank's problem loan ratio to around 25% from around 35% at end-2017. Moody's expects KBCI's asset quality to continue to improve in the near term thanks to the benign operating environment and rising real estate prices in Ireland, but the agency expects the stock of problem loans to remain high in absence of further disposal transactions. The upgrade of KBCI's BCA also reflects stronger capital ratios following the bank's ongoing deleveraging, with the reported CET1 ratio improving to 14.4% at end-june 2018 from 12.6% at end-2016. Capital remains vulnerable to stresses given the still high stock of non-performing loans, but Moody's expects that improving asset quality, stronger profitability, and further deleveraging will lead to stronger loss-absorption capacity in the short-to-medium term. KBCI's Adjusted BCA of ba1 is based on Moody's assessment of a very high probability of affiliate support from KBC Bank which leads to a four-notch uplift from its BCA of b2. This assessment is supported by the track record from the parent bank of providing support through capital injections and funding. KBCI' deposits are likely to face moderate loss-given-failure driven by (1) the modest amount of junior deposits, and (2) the absence of junior debt instruments in the liability structure which would otherwise provide deposits with a cushion against losses. This results in no uplift from the bank's Adjusted BCA. In Moody's view, the Irish government is unlikely to extend support to KBCI, which is reflected in the assigned low level of government support. As a result, Moody's has not incorporated any additional uplift for government support, leading to an assigned long-term deposit rating of Ba1. 2. KBC Bank, IFIMA and KBC Group As a result of the sale of part of its Irish loan book, KBC Bank's asset risk profile improved, with a nonperforming loan (NPL) ratio estimated at 4.5% pro-forma, down from 5.5% before the transaction, at end- September 2018. Moody's does not expect KBC Bank's NPL ratio to decrease materially below that level, absent any further asset disposals in its Irish subsidiary. On the other hand, the rating agency acknowledges the rapid and above-market-average loan growth in the bank's corporate portfolio and in international markets,

especially in the Czech Republic. These developments reduce uncertainties over the bank's overall asset risk trend. Although the bank's credit costs have been very low in the past years (with net provision write-backs in 2017 and first nine months of 2018), fast-growing activities in corporate markets and Eastern Europe may entail new risks, which could partly offset the decrease of asset risk in its Irish subsidiary. The positive outlook assigned to KBC Bank's deposit rating, IFIMA's backed senior unsecured debt rating and KBC Group's senior unsecured debt rating reflects Moody's view that, over the next 12-18 months, asset risk improvement stemming from its Irish subsidiary will supersede other developments and may eventually lead to an upgrade of KBC Bank's baa1 BCA and Adjusted BCA. KBC Bank's baa1 BCA also reflects its solid presence in Belgium and Central and Eastern European (CEE) countries, which supports its strong earnings power. The bank also benefits from strong capitalization, as evidenced by a Common Equity Tier 1 (CET1) ratio of 16% (Basel III fully loaded) as of end-september 2018, and sound funding and liquidity profiles. As at many other European banks, KBC Bank's net interest margins are suffering from the low interest rate environment, especially in Belgium, where re-pricing of deposits has reached a floor. KBC Bank's deposit rating and IFIMA's backed senior unsecured debt rating benefit from extremely low and very low loss-given-failure, leading to a three-notch and two-notch uplift, respectively, from the bank's Adjusted BCA. Both ratings also reflect the moderate likelihood of support from the Belgian government, owing to KBC Bank's systemic presence in Belgium; which leads to an additional one-notch uplift from the bank's Adjusted BCA. KBC Group's senior unsecured debt rating benefits from a moderate loss-given-failure and a low probability of government support, leading to no uplift from the bank's Adjusted BCA. OUTLOOK The positive outlooks assigned to KBC Bank, IFIMA and KBC Group's long-term deposit, issuer and senior unsecured debt ratings, where applicable, reflect Moody's expectation that KBC Bank's asset risk will continue to improve, despite rapid loan growth in corporate sector and CEE countries. The positive outlook assigned to KBCI's long-term deposit rating reflects the positive outlook assigned to its parent. WHAT COULD CHANGE RATINGS UP/DOWN KBCI's long-term deposit ratings could be upgraded as a result of (1) an upgrade of its standalone BCA owing to further improvements of asset risk and/or a sustainable increase of profitability, (2) an upgrade of KBC Bank's BCA or (3) a significant increase in the bank's bail-in-able debt together with a decrease in the bank's tangible banking assets. An upgrade of KBC Bank, IFIMA and KBC Group's long-term ratings could result from (1) significantly improved regulatory capital and asset risk ratios at the bank level; or (2) substantial issuance of senior debt by KBC Group, adding sustainable subordination in favor of KBC Bank's and IFIMA's senior creditors and volume benefiting KBC Group's senior creditors. KBCI's ratings could be downgraded as a result of (1) a downgrade of its standalone BCA or (2) a reduction in the likelihood of support from the parent. KBCI's BCA could be downgraded as a result of a significant deterioration in the bank's capital level, a reversal in the improving profitability trend, or a deterioration in asset quality and provisioning coverage. A downgrade of KBC Bank's BCA could occur as a result of (1) reduced profitability should both fees and net interest income decline; (2) reduced regulatory capital ratios at the bank and group levels, owing to a switch towards a more aggressive financial policy in terms of dividends, lending growth or acquisitions; and (3) a deterioration of asset quality. A downgrade of KBC Bank's BCA would typically result in a downgrade of the long-term ratings of KBC Bank, IFIMA and KBC Group. These ratings could also be downgraded if there is a significant and sustainable decrease in the debt loss-absorption capacity, resulting in higher loss-given-failure for one or more instrument classes. LIST OF AFFECTED RATINGS Issuer: KBC Group N.V.

...Short-term Deposit Note/CD Program, affirmed P-2...Long-term Issuer Rating, affirmed Baa1, outlook changed to Positive from Stable...Short-term Issuer Rating, affirmed P-2...Senior Unsecured Regular Bond/Debenture, affirmed Baa1, outlook changed to Positive from Stable...Senior Unsecured Medium-Term Note Program, affirmed (P)Baa1...Preferred Stock Non-cumulative, affirmed Ba1(hyb)...Other Short Term, affirmed (P)P-2 Issuer: KBC Bank N.V....Long-term Counterparty Risk Ratings, affirmed Aa3...Short-term Counterparty Risk Ratings, affirmed P-1...Long-term Bank Deposits, affirmed Aa3, outlook changed to Positive from Stable...Short-term Bank Deposits, affirmed P-1...Long-term Counterparty Risk Assessment, affirmed Aa3(cr)...Short-term Counterparty Risk Assessment, affirmed P-1(cr)...Baseline Credit Assessment, affirmed baa1...adjusted Baseline Credit Assessment, affirmed baa1...backed Junior Subordinated Regular Bond/Debenture, affirmed Baa3(hyb) Issuer: KBC Bank N.V., Succursale Francaise...Long-term Counterparty Risk Assessment, affirmed Aa3(cr)...Short-term Counterparty Risk Assessment, affirmed P-1(cr)...Long-term Counterparty Risk Ratings, affirmed Aa3...Short-term Counterparty Risk Ratings, affirmed P-1...Short-term Deposit Note/CD Program, affirmed P-1..No Outlook assigned Issuer: KBC IFIMA S.A....Backed Senior Unsecured Regular Bond/Debenture, affirmed A1, outlook changed to Positive from Stable...Backed Senior Unsecured Medium-Term Note Program, affirmed (P)A1

...Backed Subordinate Regular Bond/Debenture, affirmed Baa2...Backed Subordinate Medium-Term Note Program, affirmed (P)Baa2...Backed Other Short Term, affirmed (P)P-1 Issuer: Kredietbank North American Finance Corp..Affirmation:...Backed Commercial Paper, affirmed P-1..No Outlook assigned Issuer: KBC Bank Ireland PLC..Upgrade:...Baseline Credit Assessment, upgraded to b2 from b3...long-term Counterparty Risk Ratings, affirmed Baa2...Short-term Counterparty Risk Ratings, affirmed P-2...Long-term Bank Deposits, affirmed Ba1, outlook changed to Positive from Stable...Short-term Bank Deposits, affirmed NP...Long-term Counterparty Risk Assessment, affirmed Baa1(cr)...Short-term Counterparty Risk Assessment, affirmed P-2(cr)...Adjusted Baseline Credit Assessment, affirmed ba1...backed Commercial Paper, affirmed P-1 PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Banks published in August 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology. REGULATORY DISCLOSURES For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt 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. Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review. Items color coded in purple in this Press Release relate to unsolicited ratings for a rated entity which is nonparticipating. 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. Laurent Le Mouel Vice President - Senior Analyst Financial Institutions Group Moody's France SAS 96 Boulevard Haussmann Paris 75008 France JOURNALISTS: 44 20 7772 5456 Client Service: 44 20 7772 5454 Nicholas Hill MD - Banking Financial Institutions Group JOURNALISTS: 44 20 7772 5456 Client Service: 44 20 7772 5454 Releasing Office: Moody's France SAS 96 Boulevard Haussmann Paris 75008 France JOURNALISTS: 44 20 7772 5456 Client Service: 44 20 7772 5454 2018 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 INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES ( MIS ) ARE MOODY S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY S PUBLICATIONS MAY INCLUDE MOODY S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. 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. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY S 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. CREDIT RATINGS AND MOODY S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY S 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 AND MOODY S 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 OR MOODY S 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. CREDIT RATINGS AND MOODY S 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 the Moody s 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 SUCH RATING OR 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 rating, agreed to pay to Moody s Investors Service, Inc. 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 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. It would be reckless and inappropriate for retail investors to use MOODY S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser. 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 rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000. MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.