U.S. Corporate Issuers: Lending Surges Amid A Decline In Credit Risk In 1Q17 S&P Global Fixed Income Research Apr. 2017 Permission to reprint or distribute any content from this presentation requires the prior written approval of S&P Global Ratings. Copyright 2016 by Standard & Poor s Financial Services LLC. All rights reserved.
U.S. Corporate Credit Market: Pace Of Negative Rating Actions Slows As Lending Surges In First Quarter 2017 Downgrades have declined since 2016 and credit weakness is more broadly distributed by sector: U.S. corporate downgrades are down 64% in the first quarter of 2017 (through February) compared to the same period in 2016, while upgrades were relatively unchanged. This decline in downgrades is largely due to the fall of downgrades for oil & gas and metal, mining and steel sectors. Though the oil and gas sector continues to show elevated credit weakness (with a speculative-grade negative bias of 50%), downgrades in this sector have fallen by 89% compared to last year. Meanwhile, downgrades have been increasing for the retail and restaurants and consumer products sectors. The speculative-grade default rate fell to 4.4% in February, (down from 5.1% in December). Excluding energy and natural resources, the default rate would have been just 2.4% in February. We forecast the rate will fall to 3.9% by year end 2017. We expect the defaults to peak in the first half of the year and decline in the second half of 2017. Since December, the negative bias (the proportion of ratings that have negative outlooks or are on CreditWatch with negative implications) for speculative-grade corporates has declined by 2 percentage points (to 20%), while investment-grade has remained at 13%. The U.S. credit market has continued to show improving risk pricing and lending activity: U.S. corporate issuance is off to a strong start in 2017, up over the prior year by 30% -- as investment-grade issuance was up by 25%, while speculative-grade issuance was up 84% from prior year. Since mid-february of last year, credit spreads have been tightening across rating categories, though the lower-rated categories have contracted more rapidly as investor risk aversion has waned 2
Rating Actions and Outlooks
Rating Actions Continue To Moderate For U.S. Corporates (Count) 150 100 50 (50) U.S. Corporate Upgrades And Downgrades Downgrades Upgrades Count 120 100 80 60 20 40 20 0 40 60 80 100 120 140 160 180 200 220 240 260 280 300 U.S. Corporate Upgrades And Downgrades (Nonfinancials) Downgrades IG Upgrades IG Downgrades SG Upgrades SG (100) (150) (200) (250) (300) (350) (400) Downgrades reached a peak in 2016 Q1 and have since been steadily declining In 2017, YTD through February, downgrades are nearly 64% lower than over the same period in 2016, and are equal to the number of downgrades in 2015 Count 30 20 10 (10) (20) (30) (40) (50) (60) (70) U.S. Corporate Upgrades And Downgrades (Financials) Downgrades IG Upgrades IG Downgrades SG Upgrades SG 2005_Q1 2005_Q3 2006_Q1 2006_Q3 2007_Q1 2007_Q3 2008_Q1 2008_Q3 2009_Q1 2009_Q3 2010_Q1 2010_Q3 2011_Q1 2011_Q3 2012_Q1 2012_Q3 2013_Q1 2013_Q3 2014_Q1 2014_Q3 2015_Q1 2015_Q3 2016_Q1 2016_Q3 2017_Q1* 4 *Data as of 2/28/17. Note: Downgrades shown as a negative number. Source: S&P Global Fixed Income Research
Downgrades Show Less Concentration By Sector Than In 2016 U.S. Investment Grade Rating Actions By Sector 2017Q1 YTD (Through Feb. 28) (count) Downgrades Upgrades Retail Health care Transportation Insurance Consumer products Financial Institutions High technology Oil and gas Home/RE Automotive Utility (3) (2) (2) (1) (1) 1 1 2 2 3 U.S. Speculative Grade Rating Actions By Sector 2017Q1 YTD (Through Feb. 28) Consumer products Oil and gas High technology Media/entert Transportation Health care Financial Institutions Capital goods Telecommunications Metals/mining/steel (15) (10) (5) 5 Consumer products sector now accounts for 22% of U.S. corporate speculative-grade downgrades in 2017 (through February) Insurance The oil and gas sector accounts for 16% of U.S. corporate speculative-grade downgrades in 2017 (through February), down from 35% for full year 2016 (count) Retail Utility CP&ES Forest Downgrade Upgrade *Data as of Feb. 28, 2017. Note: Downgrades shown as a negative number. CP&ES -- Chemicals, packaging, and environmental services; Home/RE -- Homebuilders/real estate companies; Forest -- Forest products and building materials; Financial Institutions includes brokerages, finance cos, mortgage institutions and S&L. Rating changes exclude entities with no rated debt. Source: S&P Global Fixed Income Research. 5
Declining Negative Bias Indicates Fewer Potential Downgrades U.S. Investment-Grade Corporate Bias U.S. Speculative-Grade Corporate Bias 50% Negative Bias (%) Positive Bias (%) Avg Neg Bias Avg Pos Bias 50% Negative Bias (%) Positive Bias (%) Avg Neg Bias (Trailing 5 year) Avg Pos Bias (Trailing 5 year) 45% 45% 40% 40% 35% 35% 30% 30% 25% 20% 15% 10% 5% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 25% 20% 15% 10% 5% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 The negative bias for speculative-grade is currently 20%, while investment-grade negative bias is 13% Since August, the speculative-grade negative bias has declined by 4 percentage points, while investment-grade has fallen by 1 percentage point. Data as of Feb. 28, 2017. Shaded areas are periods of recession as defined by the National Bureau of Economic Research. Source: S&P Global Fixed Income Research 6
Negative Bias Shows Continued Elevated Downgrade Potential For Commodity- Related Sectors U.S. Investment Grade Corporate Rating Bias By Sector (as of 2/28/2017) Telecommunications (BBB) Transportation (BBB+) Negative Bias Stable Bias Positive Bias Negative Bias Stable Bias Positive Bias (%) 0 20 40 60 80 100 (%) 0 20 40 60 80 100 Oil and gas (BBB) Retail (BBB+) CP&ES (BBB) Financial institutions (BBB) High technology (BBB) Metals/mining/steel (BBB) Capital goods (BBB) Media/entert (BBB) Health care (A ) Consumer products (BBB+) Aerospace/defense (BBB+) Utility (BBB+) Forest (BBB) Insurance (BBB+) Home/RE (BBB) Automotive (BBB) U.S. Speculative Grade Corporate Rating Bias By Sector (as of 2/28/2017) Speculative-grade commodity-related sectors have the highest negative bias: Oil and gas is at 50% in February (down from 56% at the end of October) Metals, mining, and steel is at 27% (down from 33%) Aerospace and defense is at 28% as orders have slowed in this sector, and some companies must invest to support new aircraft programs Investment-grade negative bias is led by: Telecommunications negative bias is at 29% following announced mergers or acquisitions Retail negative bias is at 23%, as companies face structural challenges and increased competition Data as of Feb. 28, 2017. Note: Sector median ratings shown in parentheses. Net bias is the positive bias minus the negative bias. Metals = metals, mining, & steel; CP&ES = chemicals, packaging, & environmental services; Forest = forest products and building materials; Source: S&P Global Fixed Income Research. Oil and gas (B ) Financial institutions (B) Aerospace/defense (B+) Metals/mining/steel (B) Consumer products (B) Retail (B) Capital goods (B) Home/RE (B+) CP&ES (B) Transportation (B+) Utility (B+) Health care (B) High technology (B) Media/entert (B) Telecommunications (B+) Automotive (B+) Forest (B+) Insurance (B) 7
Negative Bias Is Highest Above Trend For Oil And Gas And Aerospace And Defense 60% Identifying Downgrade Potential Across Sectors 50% Oil & Gas 40% Current NEgative Bias (%) 30% 20% Aerospace & Defense Metals, Mining & Steel Retail/Restaurants Consumer Products Capital Goods CP&ES Financial Institutions Health Care Telecommunications High Technology Media & Entertainment Transportation Finance Co. 10% Homebuilders/Real Estate Co. Automotive Forest Products & Building Insurance Materials 0% 0% 10% 20% 30% 40% 50% 60% Historical Average Negative Bias (%, 1995 2/17) Data as of Feb. 28, 2017. Source: S&P Global Fixed Income Research. Oil and gas and aerospace and defense are the sectors with current negative biases that are highest above historical average Data as of Feb. 28, 2017. Source: S&P Global Fixed Income Research 8
Default Rate Expected To Fall To 3.9% By 4Q2017 (%) 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 U.S. Trailing-12-Month Speculative-Grade Default Rate And December 2017 Forecast U.S. speculative-grade default rate (actual) Base forecast (3.9%) Pessimistic (4.7%) Optimistic (3.1%) 1/31/1982 1/31/1983 1/31/1984 1/31/1985 1/31/1986 1/31/1987 1/31/1988 1/31/1989 1/31/1990 1/31/1991 1/31/1992 1/31/1993 1/31/1994 1/31/1995 1/31/1996 1/31/1997 1/31/1998 1/31/1999 1/31/2000 1/31/2001 1/31/2002 1/31/2003 1/31/2004 1/31/2005 1/31/2006 1/31/2007 1/31/2008 1/31/2009 1/31/2010 1/31/2011 1/31/2012 1/31/2013 1/31/2014 1/31/2015 1/31/2016 1/31/2017 Shaded areas are periods of recession as defined by the National Bureau of Economic Research (NBER). Source: S&P Global Fixed Income Research; S&P CreditPro 6 5 4 3 2 1 0 U.S. Trailing 12-Month Speculative-Grade Default Rate U.S. speculative grade default rate Ex. energy and natural resources S&P Global Fixed Income Research forecasts the U.S. trailing-12-month speculative-grade default rate will fall to 3.9% by December 2017 (with 70 defaults), down from 5.1% in December 2016 (with 91 defaults). In February, we estimate that the speculative-grade default rate declined to 4.4%, if we excluded the energy and natural resources sector, then the overall default rate would have been just 2.4%. Data as of February 28, 2017. Shaded areas are periods of recession as defined by the National Bureau of Economic Research. Source: S&P Global Fixed Income Research 9
The Oil And Gas Sector Continues To Lead Defaults And Weakest Links (Count) 60 U.S. Corporate Defaults By Sector Defaults FY 2016 Defaults YTD 2017 (Count) 40 Weakest Links By Sector 50 40 35 30 25 30 20 20 15 10 10 0 5 0 U.S. speculative-grade corporate defaults total five YTD through February, led by the oil and gas sector with two The oil and gas and consumer products sectors have the most companies that are weakest links, and show elevated default risk Weakest Links are issuers rated B- or lower with either a negative outlook CreditWatch, and these issuers maintain an important role as potential default indicators because they have greater default risk than higher-rated issuers Defaults data as of Feb. 28, 2017. Weakest links as of 1/19/2017. CP&ES -- Chemicals, packaging, and environmental services; Home/RE -- Homebuilders/real estate companies; Metals Metals, mining, and steel; Forest -- Forest products and building materials; Financial Institutions includes banks, brokerages, finance cos, mortgage institutions and S&L. Source: S&P Global Fixed Income Research. 10
Distress Among Retail And Restaurants Has Surpassed Oil And Gas U.S. Distressed Credit Ratio (%) 90 80 S&P Global Ratings' U.S. distress ratio S&P/LSTA Leveraged Loan Index distress ratio (%) 25 U.S. Corporate Distress Ratio By Sector 70 20 60 50 15 40 10 30 20 5 10 0 The distress ratio (the share of speculative-grade issues with option-adjusted composite spreads of more than 1,000 basis points (bps) relative to U.S. Treasuries) has declined in recent months, and is back down to 6.9% in February (down from 34% one year ago). Retail and restaurants is now the sector with the highest distress ratio (21%), having just surpassed the oil and gas sector in January Data: Feb. 15, 2017. CP&ES -- Chemicals, packaging, and environmental services; Home/RE -- Homebuilders/real estate companies; Metals Metals, mining, and steel; Forest -- Forest products and building materials; Financial Institutions includes, finance cos, mortgage institutions and S&L (Note: banks and brokers excluded due to small sample size). Source: S&P Global Fixed Income Research. 11
U.S. Corporate Debt Maturities Should Be Manageable In The Near Term U.S. Corporate Rated Debt Maturing By Year (Investment- and Speculative-Grade) Investment Grade Speculative Grade (Bil. $) 1200.0 1000.0 800.0 600.0 400.0 200.0 0.0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 U.S. companies have $4.2 trillion in rated debt maturing through 2021, annual maturities rise to a peak of $1.03 trillion in 2021 31% of the maturing debt (through 2021) is speculative grade ( BB+ and lower) Speculative-grade debt is higher is more susceptible to refinancing risk, though maturities are modest in 2017 and 2018 Note: Data as of December 30, 2016. Source: S&P Global Fixed Income Research. 12
U.S. Nonfinancial Corporate Speculative-Grade Maturities Peak In 2021 U.S. Nonfinancial Corporate Speculative-Grade Debt Maturing By Year (Bil. $) BB B CCC/C 450.0 400.0 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0 2017 2018 2019 2020 2021 Though $1.16 trillion in U.S. nonfinancial corporate speculative-grade is scheduled to mature through 2021, the majority of this debt will not mature until 2020-2021 Of the maturing debt, 47% is in the highest speculative-grade category of 'BB We view it as a positive that lower-rated debt has a longer window before it reaches peak maturity Data as of December 30, 2016. Source: S&P Global Fixed Income Research. 13
Issuance And Market Overview
U.S. Corporate Bond Issuance Is Off To A Stronger Start Over 2016 ($ bln) 1,200 Investment Grade Bond Issuance 2013 2014 2015 2016 2017 ($ bln) 300 Speculative Grade Bond Issuance 2013 2014 2015 2016 2017 1,000 250 800 200 600 150 400 100 200 50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec U.S. corporate investment-grade bond issuance is up 25% YoY (through February), and is up 6% over issuance in the same period in 2015 Speculative-grade corporate issuance is up to $29 billion in 2017 (through February), from just $16 billion over the same period in 2016 Data as of Feb. 28, 2017. Source: S&P Global Fixed Income Research; Thomson Reuters 15
Yields Show Little Change So Far In 2017 S&P Global Ratings U.S. Investment- And Speculative-Grade Yields vs. 10-Year Treasury S&P Global Ratings U.S. Corporate Composite Spreads (%) 11.0 10.5 10.0 9.5 9.0 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 Investment Grade Yield Speculative Grade Yield Treasury 10 Year (bps) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 CCC B BB BBB A AA 2/12/2015 3/13/2015 4/10/2015 5/11/2015 6/9/2015 7/8/2015 8/5/2015 9/2/2015 10/1/2015 10/29/2015 11/27/2015 12/28/2015 1/27/2016 2/25/2016 3/24/2016 4/22/2016 5/20/2016 6/20/2016 7/19/2016 8/16/2016 9/14/2016 10/12/2016 11/10/2016 12/9/2016 1/10/2017 2/7/2017 Ten-year Treasury yields rose by 56 bps to 2.43% from the election to the end of the year, and the yield stood at 2.35% at the end of February The investment-grade yield is currently 3.99%, while the speculative-grade yield is 6.14%, each is little changed since the beginning of the year Since year end, credit spreads have tightened modestly across rating categories, though the lower-rated categories have contracted more rapidly as investor risk aversion has waned Data as of February 28, 2017. Source: S&P Global Fixed Income Research; Thomson Reuters 16
Spreads Widening For Retail And Restaurants Sector U.S. Investment Grade Corporate Composite Spreads By Sector Spread (as of 2/28/2017) Change 1Q2017 (thru 2/28/17) (bps) 50 0 50 100 150 200 250 Metals, Mining and Steel Forest Telecommunications Automotive Media and Entertainment Oil and Gas Bank and Brokerage Home/RE Financial Institutions CP&ES Insurance Retail and Restaurants Utility Consumer Products Transportation Health Care Capital Goods High Technology Aerospace and Defense U.S. Speculative Grade Corporate Composite Spreads By Sector Spread (as of 2/28/2017) Change 1Q2017 (thru 2/28/2017) (bps) 200 100 0 100 200 300 400 500 600 Retail and Restaurants Oil and Gas Transportation Capital Goods Health Care Metals, Mining and Steel Insurance Utility Telecommunications High Technology Forest Financial Institutions Media and Entertainment Home/RE Consumer Products Automotive CP&ES Investment grade corporate composite spreads contracted in 2017 (through February) for all sectors except retail and restaurants (which widened by just 3 bps) Speculative-grade spreads for the retail and restaurants sector widened by 26 bps in 2017, to 486 bps, and this sector now shows the widest spread *Data as of Feb. 28, 2017. Note: Investment-grade spreads calculated for bonds with a 10-year maturity; speculative-grade spreads calculated on bonds with a five-year maturity. Note: CP&ES -- Chemicals, packaging, and environmental services; Home/RE -- Homebuilders/real estate companies; Forest -- Forest products and building materials; S&P Global Fixed Income Research 17
Investment- And Speculative-Grade Returns Gain In First Quarter % Investment Grade Total Return (Quarterly) Speculative Grade Total Return (Quarterly) 14.0 20.0 12.0 10.0 15.0 8.0 6.0 10.0 4.0 5.0 2.0 0.0 0.0 2.0 4.0 5.0 6.0 10.0 1Q_2017 4Q_2010 1Q_2011 2Q_2011 3Q_2011 4Q_2011 1Q_2012 2Q_2012 3Q_2012 4Q_2012 1Q_2013 2Q_2013 3Q_2013 4Q_2013 1Q_2014 2Q_2014 3Q_2014 4Q_2014 1Q_2015 2Q_2015 3Q_2015 4Q_2015 1Q_2016 2Q_2016 3Q_2016 4Q_2016 1Q_2017 4Q_2010 1Q_2011 2Q_2011 3Q_2011 4Q_2011 1Q_2012 2Q_2012 3Q_2012 4Q_2012 1Q_2013 2Q_2013 3Q_2013 4Q_2013 1Q_2014 2Q_2014 3Q_2014 4Q_2014 1Q_2015 2Q_2015 3Q_2015 4Q_2015 1Q_2016 2Q_2016 3Q_2016 4Q_2016 Investment-grade credit gained 6% (on a total return basis) in 2016, even with a decline of 3.5% in the fourth quarter; returns have rebounded 1.6% in 1Q 2017 (through February) Speculative-grade returns were up 17% in 2016, including a gain of 1.6% in the fourth quarter; returns climbed to 2.5% in the 1Q 2017 (through February) * Data as of February 28, 2017. Source: S&P Global Fixed Income Research 18
Total Returns Positive Across Sectors, Though Retail Lags U.S. Investment Grade Corporate Composite Total Returns By Sector 2016 Return YTD Return 2017 (Through Feb. 28) (%) 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Metals, Mining and Steel Oil and Gas Utility Automotive Media and Entertainment Forest CP&ES Transportation Telecommunications High Technology Aerospace and Defense Insurance Retail and Restaurants Capital Goods Consumer Products Home/RE Financial Institutions Health Care Bank and Brokerage U.S. Speculative Grade Corporate Composite Total Returns By Sector 2016 Return YTD Return 2017 (Through Feb. 28) (%) 0.0 10.0 20.0 30.0 40.0 50.0 60.0 Metals, Mining and Steel Oil and Gas Utility CP&ES High Technology Aerospace and Defense Capital Goods Retail and Restaurants Telecommunications Media and Entertainment Insurance Financial Institutions Automotive Consumer Products Forest Health Care Transportation Home/RE Returns for metals, mining, and steel showed the strongest returns in 2016, with speculative-grade rebounding 51% as investment-grade gained 14%, followed by oil and gas with a speculative-grade return of 32% and investment-grade gain of 13% In 2017 (through February), the retail and restaurants sector had the lowest return for both investment- and speculative-grade, with 0.7% and 0%, respectively *Data as of Feb. 28, 2017. Note: CP&ES -- Chemicals, packaging, and environmental services; Home/RE -- Homebuilders/real estate companies; Forest -- Forest products and building materials; S&P Global Fixed Income Research. 19
Rating Distributions
Newly Assigned U.S. Corporate Ratings Increased In 2016 Count 600 500 400 300 200 100 Newly Assigned U.S. Corporate Issuer Ratings Q1 Q2 Q3 Q4 50 45 40 35 30 25 20 15 10 5 0 Newly Assigned U.S. Corporate Ratings By Sector 2015 2016 0 In 2016, the number of newly-assigned U.S. corporate ratings is up modestly in 2016 (to 316) from 265 in 2015 The sectors that saw increases over 2015 included high technology, consumer/services, and energy and natural resources Note that these newly-assigned ratings include issuers receiving new ratings postdefault 21 Data as of Dec. 31, 2016. Source: S&P Global Fixed Income Research; S&P CreditPro.
Corporate Rating Distributions U.S. Corporate Rating Distribution CCC/C 5% B 33% BB 18% AA 5% AAA 0% A 16% BBB 23% U.S. Nonfinancial Corporate Rating CCC/C 6% B 40% AAA 0% AA 1% A 11% BB 20% BBB 22% U.S. Financial Corporate Rating Distribution BB 9% CCC/C 1% BBB 29% B 11% AAA 0% AA 15% A 35% 56% of U.S. corporate ratings are speculative grade Nonfinancials have a much higher proportion of speculative-grade companies (at 66%) vs. financials (at 21%) As credit conditions become more challenging, those companies in the lower-rating categories are more likely to experience funding challenges Data as of Dec. 31, 2016. Source: S&P Global Fixed Income Research; Standard & Poor s CreditPro. 22
Copyright 2017 by Standard & Poor s Financial Services LLC. All rights reserved. No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an as is basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages. Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P s opinions, analyses and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof. S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees. Australia Standard & Poor's (Australia) Pty. Ltd. holds Australian financial services license number 337565 under the Corporations Act 2001. Standard & Poor s credit ratings and related research are not intended for and must not be distributed to any person in Australia other than a wholesale client (as defined in Chapter 7 of the Corporations Act). STANDARD & POOR S, S&P, CREDITPRO and RATINGSDIRECT are registered trademarks of Standard & Poor s Financial Services LLC.