us abs credit trends - moody's · us abs credit trends – december 2016. 4. strengthening...
Post on 06-Apr-2018
218 Views
Preview:
TRANSCRIPT
2US ABS Credit Trends – December 2016
Contents1. Macroeconomic Backdrop
2. US Auto ABS
3. US Credit Card ABS
4. US Equipment ABS
5. Emerging ABS Sectors» Marketplace Lending (MPL)
» Handset Financing
» Property Assessed Clean Energy (PACE)
» Solar
4US ABS Credit Trends – December 2016
Strengthening Labor MarketUnemployment Expected to Continue at Current Levels as Consumer Sentiment Remains Stable
Source: U.S. Bureau of Labor Statistics, Moody’s Analytics Source: University of Michigan
0
20
40
60
80
100
120
Jan-
10Ju
n-10
Nov
-10
Apr
-11
Sep
-11
Feb-
12Ju
l-12
Dec
-12
May
-13
Oct
-13
Mar
-14
Aug
-14
Jan-
15Ju
n-15
Nov
-15
Apr
-16
Sep
-16
Con
sum
er S
entim
ent:
Q1-
66=1
00
3%
4%
5%
6%
7%
8%
9%
10%
11%
Jan-
10Ju
l-10
Jan-
11Ju
l-11
Jan-
12Ju
l-12
Jan-
13Ju
l-13
Jan-
14Ju
l-14
Jan-
15Ju
l-15
Jan-
16Ju
l-16
Jan-
17Ju
l-17
Jan-
18Ju
l-18
Une
mpl
oyem
ent R
ate
Unemployment rate: Total, (%, SA)Baseline Scenario (November 2016)
5US ABS Credit Trends – December 2016
Household Debt and Oil Expected to Rise
0
20
40
60
80
100
120
Jan-
10Ju
l-10
Jan-
11Ju
l-11
Jan-
12Ju
l-12
Jan-
13Ju
l-13
Jan-
14Ju
l-14
Jan-
15Ju
l-15
Jan-
16Ju
l-16
Jan-
17Ju
l-17
Jan-
18Ju
l-18
Dol
lars
per
Bar
rel
West TX Intermediate Spot: Cushing, (FOB $ per Barrel, NSA)
Baseline Scenario (November 2016)
8.5%
9.0%
9.5%
10.0%
10.5%
11.0%
11.5%
12.0%
Mar
-10
Sep
-10
Mar
-11
Sep
-11
Mar
-12
Sep
-12
Mar
-13
Sep
-13
Mar
-14
Sep
-14
Mar
-15
Sep
-15
Mar
-16
Sep
-16
Mar
-17
Sep
-17
Mar
-18
Sep
-18
Perc
enta
ge o
f Dis
posa
ble
Inco
me
Household Debt Service Ratio, (% of Disposable Inc., SA)
Baseline Forecast (November 2016)
Source: Federal Reserve, Moody’s Analytics Source: U.S. Energy Information Administration, Moody’s Analytics
6US ABS Credit Trends – December 2016
Issuance Tote Board
0
20
40
60
80
100
120
140
160
180
200
Janu
ary
Febr
uary
Mar
ch
Apr
il
May
June
July
Aug
ust
Sep
tem
ber
Oct
ober
Nov
embe
r
Dec
embe
r
Dol
lars
(Billi
ons)
2015 2016
Autos50%
Credit Cards13%
Other17%
Student Loans8%
Consumer Loans6%
Equipment6%
As Percentage of Dollar Amount
Cumulative Issuance by Asset Class, 2016Percentage, transactions announced through 8 November 2016
Cumulative Issuance, 2015-2016Transactions closed through 31 October 2016
Source: Moody’s Investors Service Source: Moody’s Investors Service
7US ABS Credit Trends – December 2016
Spreads on 5-Year Fixed Credit Card ABSSpreads Spike During Crisis But Remains Stable Since 2010 Between 20 and 60 Basis Points
Source: Asset Backed Alert, Deutsche Bank
0
100
200
300
400
500
600
700
Jan-
07
May
-07
Sep
-07
Jan-
08
May
-08
Sep
-08
Jan-
09
May
-09
Sep
-09
Jan-
10
May
-10
Sep
-10
Jan-
11
May
-11
Sep
-11
Jan-
12
May
-12
Sep
-12
Jan-
13
May
-13
Sep
-13
Jan-
14
May
-14
Sep
-14
Jan-
15
May
-15
Sep
-15
Jan-
16
May
-16
Sep
-16
Five
Yea
r Fix
ed C
ard
Spre
ads
(bas
is p
oint
s)
9US ABS Credit Trends – December 2016
Auto Sales and Outstanding Auto LoansSales of New Autos and Light Trucks Will Likely Slow, but Pace Will Remain Strong
Source: US Bureau of Economics, Federal Reserve, Moody’s Analytics
$-
$200
$400
$600
$800
$1,000
$1,200
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Jan-
10
Apr
-10
Jul-1
0
Oct
-10
Jan-
11
Apr
-11
Jul-1
1
Oct
-11
Jan-
12
Apr
-12
Jul-1
2
Oct
-12
Jan-
13
Apr
-13
Jul-1
3
Oct
-13
Jan-
14
Apr
-14
Jul-1
4
Oct
-14
Jan-
15
Apr
-15
Jul-1
5
Oct
-15
Jan-
16
Apr
-16
Jul-1
6
Oct
-16
Jan-
17
Apr
-17
Jul-1
7
Oct
-17
Out
sand
ing
Aut
o Lo
anss
(Billi
ons)
New
Veh
icle
Sal
es (U
nits
, Tho
usan
ds)
New Vehicle Sales: Autos and light trucks, (Ths. Units, SAAR)Baseline Scenario (November 2016)Consumer Credit: Motor vehicle loans: Owned and securitized, (Bil. USD, NSA)
10US ABS Credit Trends – December 2016
Key Credit Themes
» Credit quality of new auto loan ABS will remain largely consistent with 2016 pools
» Stable economic environment and build-up of credit enhancement will keep credit performance of outstanding auto loan ABS transactions strong in 2017
» Stable used car values will help support auto lease ABS performance, owing to continued demand for used vehicles
» Floorplan ABS performance will continue to benefit from robust auto sales and ongoing consolidation of dealer networks
» Idiosyncratic issues owing to recalls, other events will continue to affect some auto ABS
11US ABS Credit Trends – December 2016
» Credit quality of new auto loans will remain consistent with 2016 transactions, which will help performance of new auto loan ABS transactions
» Stability of new auto loan origination is a result of slight tightening of underwriting
Credit Quality of New Auto Loan ABS Will Stabilize
Summary of Collateral and Loan Terms at Securitization Closing by Year of Issuance
Source: Moody’s Investors Service
Prime pools Sub-prime pools
Year
WA OT (months) WA RT WA APR (%)
WA FICO WA New (%)
WA OT (months) WA RT WA APR (%)
WA FICO WA New (%)
2006 61.8 53.3 6.6 721 75.5 63.9 60.3 17.5 577 23.3
2007 62.2 55.3 6.3 717 70.2 65.4 61.5 17.2 580 21.3
2008 61.4 53.4 6.5 723 71.9 68.6 61.9 16.8 585 21.9
2009 62.6 54.3 5.6 740 72.5 64.0 53.7 17.3 618 18.1
2010 62.0 52.6 4.9 743 78.7 68.5 62.7 16.6 583 32.9
2011 62.3 54.5 4.5 739 76.3 68.8 57.5 16.2 586 28.8
2012 62.8 54.3 4.2 743 74.2 67.8 60.9 17.3 576 25.9
2013 64.0 56.1 4.4 738 70.9 68.1 66.0 16.7 577 29.6
2014 64.4 54.1 4.1 742 66.9 68.7 65.8 16.2 582 32.1
2015 65.2 55.7 4.4 738 64.8 70.4 67.9 17.4 570 33.2
2016 Through Q3 64.3 54.2 3.7 743 74.1 68.4 63.9 16.3 580 34.9
12US ABS Credit Trends – December 2016
» Annualized net loss rates will continue to increase year-over-year but lifetime cumulative net losses will remain within expectations
– Prime transactions have incurred higher losses since 2011 due to weakening credit quality
Credit Performance of Outstanding Prime Loan Pools Will Remain Strong
Cumulative Net Losses in Prime Auto Loan ABS Pools Have Increased from 2010-11 Levels
Source: Moody's Investors Service, servicing reports
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
1 4 7 10 13 16 19 22 25 28 31 34
Cum
ulat
ive
Net
Los
s
Months Since Closing
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
13US ABS Credit Trends – December 2016
Auto Lease ABS Performance Will Remain Strong
» The credit performance of auto lease ABS transactions will remain robust in 2017, supported by the steady economic environment; residual value performance will remain steady due to a stable used vehicle market
» Leasing will continue to gain popularity, as reflected by its rising penetration rate– As of Q3 2016, leasing as a percentage of new vehicle sales is at 29%, from 18% in Q3 2010
– Credit quality of lessees has been steady both in the general market and in the securitized lease pools, as reflected by consistent credit scores in 2016 compared with 2015
» However, lower vehicle trade-in values, along with a looming interest rate increase, could reduce lease affordability
14US ABS Credit Trends – December 2016
Floorplan ABS Performance Will Continue to Benefit from Robust Auto Sales and Consolidation of Dealers» Stable auto sales will continue to be credit positive for dealer floorplan ABS in 2017 by
maintaining the ABS payment rates well above trigger levels.
– Auto dealers continue to benefit from high new vehicle sales, as seasonally adjusted annual sales once again averaged around 17.5 million units in Q3 2016. Demand remains high, enabling dealers to grow further. Consolidation of small dealers will continue as a result of larger dealers putting capital to work through acquisitions.
– Larger dealers tend to be less vulnerable to downturns in vehicle sales, because they have other sources of revenue such as selling vehicle parts or providing automotive maintenance
» Despite a slowdown in the growth rate of auto sales, as anticipated by Moody’s Analytics, dealers will be supported by high gross margin parts and service operations
15US ABS Credit Trends – December 2016
Regulators Will Continue to Scrutinize Business Practices of Auto Lenders» Regulatory scrutiny of subprime auto lenders is likely to continue» Although the scrutiny could strengthen the industry over the long term if it helps to
weed out unethical lending practices, credit performance could decline over the short term if regulators require changes to loan servicing and collection practices
» As of November 2016 Auto ABS issuers will need to comply with additional requirements under Reg AB II, a US Securities and Exchange Commission disclosure rule
– Reg AB II mandates loan-level disclosure about securitized pools
– The added disclosures will enhance transparency and reporting requirements of auto ABS
» For securitizations that close after December 2016, ABS issuers in the public market will need to add information in their prospectuses regarding their risk retention, a requirement under the Dodd-Frank Act– The disclosures will include the form of risk retention (horizontal, vertical or a combination of
the two) and the method of calculating the fair value of the notes and residual interest
17US ABS Credit Trends – December 2016
Key Credit Themes
» US credit card ABS will continue to perform well through 2017‒ Strong economy and seasoned card accounts with high quality collateral drive strong performance
» While managed portfolio performance diverges from trust performance, the Big Six sponsors will maintain their credit strength
» Risks will be low for credit card trusts in the near term– Likelihood of significant new account additions is low
– Aaa rated notes are highly resilient
» Today’s exceptional credit quality and performance will not last
18US ABS Credit Trends – December 2016
» Charge-off rates and total delinquencies continue to remain low, owing to the very seasoned, high credit quality credit card accounts backing the ABS– A large portion of receivables generated by weaker borrowers exited the card trusts when
sponsors charged off their accounts after the recession – Most issuers have not added new receivables in recent years, so trust portfolios contain fewer
risky borrowers and more transactors
1
2
3
4
5
6
7
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Jul-0
0Ja
n-01
Jul-0
1Ja
n-02
Jul-0
2Ja
n-03
Jul-0
3Ja
n-04
Jul-0
4Ja
n-05
Jul-0
5Ja
n-06
Jul-0
6Ja
n-07
Jul-0
7Ja
n-08
Jul-0
8Ja
n-09
Jul-0
9Ja
n-10
Jul-1
0Ja
n-11
Jul-1
1Ja
n-12
Jul-1
2Ja
n-13
Jul-1
3Ja
n-14
Jul-1
4Ja
n-15
Jul-1
5Ja
n-16
Jul-1
6
Perc
enta
ge (%
)
YOY
Cha
nge
(%)
YoY Change Total Delinquency Rate
2
4
6
8
10
12
-60%
-40%
-20%
0%
20%
40%
60%
80%
Jul-0
0Ja
n-01
Jul-0
1Ja
n-02
Jul-0
2Ja
n-03
Jul-0
3Ja
n-04
Jul-0
4Ja
n-05
Jul-0
5Ja
n-06
Jul-0
6Ja
n-07
Jul-0
7Ja
n-08
Jul-0
8Ja
n-09
Jul-0
9Ja
n-10
Jul-1
0Ja
n-11
Jul-1
1Ja
n-12
Jul-1
2Ja
n-13
Jul-1
3Ja
n-14
Jul-1
4Ja
n-15
Jul-1
5Ja
n-16
Jul-1
6
Perc
enta
ge (%
)
YOY
Cha
nge
(%)
YOY Change Charge-off Rate
US Credit Card ABS Will Continue to Perform Well Through 2017 as Charge-Offs Will Remain Low
Charge-offs and Total Delinquencies Are Low
Source: Moody’s Investors Service based on data from public trust filings
19US ABS Credit Trends – December 2016
-
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
Jul-0
0Ja
n-01
Jul-0
1Ja
n-02
Jul-0
2Ja
n-03
Jul-0
3Ja
n-04
Jul-0
4Ja
n-05
Jul-0
5Ja
n-06
Jul-0
6Ja
n-07
Jul-0
7Ja
n-08
Jul-0
8Ja
n-09
Jul-0
9Ja
n-10
Jul-1
0Ja
n-11
Jul-1
1Ja
n-12
Jul-1
2Ja
n-13
Jul-1
3Ja
n-14
Jul-1
4Ja
n-15
Jul-1
5Ja
n-16
Jul-1
6
Perc
enta
ge (%
)
YOY
Cha
nge
(%)
YoY Change 3-Month Avg XS
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Jul-0
0Ja
n-01
Jul-0
1Ja
n-02
Jul-0
2Ja
n-03
Jul-0
3Ja
n-04
Jul-0
4Ja
n-05
Jul-0
5Ja
n-06
Jul-0
6Ja
n-07
Jul-0
7Ja
n-08
Jul-0
8Ja
n-09
Jul-0
9Ja
n-10
Jul-1
0Ja
n-11
Jul-1
1Ja
n-12
Jul-1
2Ja
n-13
Jul-1
3Ja
n-14
Jul-1
4Ja
n-15
Jul-1
5Ja
n-16
Jul-1
6
Perc
enta
ge (%
)
YOY
Cha
nge
(%)
YOY Change Payment Rate (3-Mo Avg)
US Credit Card ABS Will Continue to Perform Well Through 2017 as Excess Spread Remains High» The strong economic environment in the US and the high proportion of transactors in
the securitized pools will support this elevated level of payments» Excess spread is at elevated levels because of lower charge-offs, lower coupons on
the bonds, elevated finance charges compared to the prevailing low interest rates, and increased interchange
Principal Payment Rates and Excess Spread Remain Elevated
Source: Moody’s Investors Service based on data from public trust filings
20US ABS Credit Trends – December 2016
Today’s Exceptional Credit Quality and Performance Will Not Last » Performance of credit card receivables will face risks beyond 2016 as consumer debt
and interest rates continues to increase and banks continue to loosen their underwriting standards
Standards Loosen for Credit Cards as the Economy Recovers from the Recession
Source: Federal Reserve, Moody's Investors Service
Note: Data are net percentages of total respondents to the April 2016 Federal Reserve Board Senior Loan Officer Opinion Survey. Percentages above zero indicate relaxing underwriting standards and stronger demand for credit cards. Percentages below zero indicate tightening underwriting standards and weaker demand for credit cards. Data reflects demand for credit cards since Q2 2011 and for all consumer loans before that date.
-80%-70%-60%-50%-40%-30%-20%-10%
0%10%20%30%
Q1-
06
Q3-
06
Q1-
07
Q3-
07
Q1-
08
Q3-
08
Q1-
09
Q3-
09
Q1-
10
Q3-
10
Q1-
11
Q3-
11
Q1-
12
Q3-
12
Q1-
13
Q3-
13
Q1-
14
Q3-
14
Q1-
15
Q3-
15
Q1-
16
Q3-
16
Net Percentage of Domestic Banks Relaxing (Tightening) Standards on Credit Cards
22US ABS Credit Trends – December 2016
» Despite slight declines in economic growth, credit quality of Equipment ABS remain strong in 2016, owing to the financial stability of the underlying obligors
– New agriculture and construction equipment ABS continue to exhibit slight weakness as a result of weakness in the agricultural market.
– Uncertain economic environment may affect performance of new and outstanding ABS backed by trucking transportation and other equipment loans, such as medical, mining and drilling equipment.
– The good credit quality of new and outstanding small-ticket equipment ABS transactions continue to be reflected by the low loss rates on the loans to generally high-quality obligors underlying the equipment contracts in these transactions
Key Credit Themes
25US ABS Credit Trends – December 2016
» Marketplace Lending (MPL) originations are hampered by increased regulatory scrutiny
» MPL ABS issuance picks up despite market challenges» Any weakness in the US economy will further stress on the nascent MPL industry» Legal and regulatory risks continue to be at the forefront
‒ Viability of the partner-bank loan origination model remains uncertain‒ Marketplace lenders have altered their strategies and business models to mitigate risk‒ Increased regulatory oversight from governing bodies may burden MPL platforms
» Recent events shed light to risks related to corporate governance and data quality» Performance of outstanding ABS in 2017 will be stable
Key Credit Themes
26US ABS Credit Trends – December 2016
MPL Originations Hampered by Increased Scrutiny
Rapid Growth of Marketplace Loan Originations Ended in 2016
Source: Orchard Platform, Moody’s Investors Service
» Regulators are looking closely at marketplace lenders as a result of negative developments in 2016 including:
‒ Lending Club’s CEO resigning amid questions about data manipulation and conflicts of interest‒ The weaker than expected performance of some marketplace lending platforms‒ Recent court developments that highlighted legal risks associated with the partner-bank
origination model
14.0%
14.5%
15.0%
15.5%
16.0%
16.5%
17.0%
17.5%
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
Q2-
13
Q3-
13
Q4-
13
Q1-
14
Q2-
14
Q3-
14
Q4-
14
Q1-
15
Q2-
15
Q3-
15
Q4-
15
Q1-
16
Q2-
16
Q3-
16
WA
Inte
rest
Rat
e
Orig
inat
ions
(billi
ons)
Unsecured Consumer Loan Originations Weighted Average Interest Rate
28US ABS Credit Trends – December 2016
0%10%20%30%40%50%60%70%80%
Sep
-14
Oct
-14
Nov
-14
Dec
-14
Jan-
15
Feb-
15
Mar
-15
Apr
-15
May
-15
Jun-
15
Jul-1
5
Aug
-15
Sep
-15
Oct
-15
Nov
-15
Dec
-15
Jan-
16
Feb-
16
Mar
-16
Apr
-16
May
-16
Jun-
16
Jul-1
6
Aug
-16
Sep
-16
Quarter Ending
Subsidy/other Installment plans Leasing Total Financed
Handset Financing Continues to Increase» Seller financing – i.e. installment plans/loans and leases – is now part of most
consumers’ purchases of mobile phones, reflecting a shift since 2013 away from offers of subsidies for device purchases at all of the Big Four carriers:– Verizon Communications, Inc.
– AT&T Corporation
– T-Mobile US Inc.
– Sprint Corporation
» The wide adoption signals the diverse credit quality of borrowers taking on the contracts
Sprint Sales Illustrate How Consumers Are Moving Toward Phone Financing
Source: Company presentations, Moody’s Investors Service
30US ABS Credit Trends – December 2016
» PACE programs provide financing of energy efficiency, renewable energy and water conservation upgrades to residential and commercial properties– Local governments partner with private lenders to provide 100% financing to homeowners for
eligible clean energy home improvement projects; homeowners repay the costs through long-term special tax assessments that local governments place on property tax bills
– PACE programs are enacted through state legislation, currently established in 33 states and DC– PACE legislation typically specifies that a PACE lien is senior to all pre-existing non-tax liens,
including first-lien mortgages
PACE Provides Financing of Home Improvements
Tax Liens* Senior PACE Subordinate PACE Mortgages
Lien Type Involuntary Voluntary** Voluntary** Voluntary
Obligation Assumed by Subsequent Property Owner No Yes Yes No
Future Payments Accelerated Upon Foreclosure N/A No No Yes
Seniority to Mortgage Senior Senior*** Contractually Subordinated N/A
Use of Proceeds N/A Property Improvements Property Improvements Any
Typical LTV Limit N/A 15% 15% 60-97%****
* Liens on properties arising out of delinquent property taxes, assessments, sewer rents, sewer surcharges, water rents, and/or other charges**The decision to join a PACE assessment district is voluntary, but the incurrence of a PACE lien is considered involuntary under some PACE legislation*** Stipulated by PACE legislation in most states such as California**** For agency mortgages
Comparison of PACE with Other Asset Classes
Source: Moody's Investors Service
32US ABS Credit Trends – December 2016
» Solar loan originations are likely to increase in 2017, resulting in solar loan ABS‒ Over half of the systems will be owned rather than leased in 2017 based on GTM Research
» As costs of residential solar photovoltaic (PV) systems decline, more financing options, such as loans, become available‒ Some loans might offer more savings than leases and power purchase agreements (PPAs)
Solar Loans Are Becoming a Larger Share of New Originations
Source: GTM Research
Customer Owned Systems Will Exceed Third Party Owned for New Residential Solar in 2017
34US ABS Credit Trends – December 2016
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
© 2016 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 CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY’S (“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. 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.
top related