cee corporates amid economic turbulence stabilisation of credit quality during 2010 icap, sofia,...
TRANSCRIPT
CEE Corporates Amid Economic Turbulence Stabilisation of credit quality during 2010
ICAP, Sofia, December 2010Petr Vins, Branch Manager, CEE
CEE Corporates Amid Economic Turbulence 2
Agenda
1. Moody’s Outlook for Corporates in 2010 and towards 2011
2. CEE Region and its Characteristics
3. How Moody’s Assess Corporate Creditworthiness
4. Positioning of CEE Corporates
5. Questions and Answers
CEE Corporates Amid Economic Turbulence 3
Moody’s Outlook for Corporates
in 2010 and towards 2011
(sectors, GRIs)
CEE Corporates Amid Economic Turbulence 4
Moody’s global macroeconomic risk scenarioOn the “Hook” for some time yet
1. Outlook for 2010
A sluggish recovery continues to be the most likely global macro-economic scenario
» No strong rebound of global economy in 2010 and 2011, …
» …but return to trend growth rates, with persistent unemployment and budget deficits
» Many economies will not go back on their previous output path
» Recovery will be fragile because of numerous headwinds (sovereign risk, banking sector)
Global Marco-Economic and Credit Conditions
Source: Moody‘s Investors Service
as per 05/09 as per 09/09 as per 01/10 as per 07/10 as per 01/10 as per 07/10France 0.0 / 1.0 0.5 / 1.5 1.0 / 2.0 1.0 / 2.0 1.5 / 2.5 1.5 / 2.5Germany -0.5 / 0.5 0.5 / 1.5 1.2 / 2.2 1.2 / 2.2 1.5 / 2.5 1.5 / 2.5Italy -0.5 / 0.5 0.0 / 1.0 0.5 / 1.5 0.5 / 1.5 1.0 / 2.0 1.0 / 2.0UK -0.5 / 0.5 0.5 / 1.0 1.0 / 2.0 0.5 / 1.5 2.0 / 3.0 2.0 / 3.0USA 1.0 / 2.0 1.5 / 2.5 2.0 / 3.0 2.5 / 3.5 2.5 / 3.5 2.5 / 3.5Russia 1.5 / 2.5 1.5 / 2.5 2.0 / 3.0 4.0 / 5.0 4.0 / 5.0 4.0 / 5.0China 7.5 / 8.5 8.0 / 9.0 8.5 / 9.5 9.5 / 10.5 8.5 / 9.5 8.5 / 9.5Japan 0.0 / 1.0 0.0 / 1.0 1.0 / 2.0 1.5 / 2.5 1.0 / 2.0 1.5 / 2.5
= upward revision from previous forecast = downward revision from previous forecast
2010 2011
CEE Corporates Amid Economic Turbulence
Negative pressure softened since H2 2009moving towards stabilization
Downward pressure on corporate ratings is gradually easing
5
0
25
50
75
Upgrades Downgrades
Source: Moody‘s Investors ServiceNote: includes multiple actions per issuer
CFG EMEA Quarterly Upgrades and Downgrades
CEE Corporates Amid Economic Turbulence
Moody’s Outlook for Key Sectors
Moody’s has stabilised most cyclical industry outlooks over the past few months, but issuers may retain negative outlooks due to specific challenges
Industry Outlook Last Update Comment
Building Materials Negative March 2010 Signs of recovery remain elusive
Pharmaceuticals Negative June 2010 Global pharmaceuticals: approaching patent cliff set to dampen revenues and margins
Auto Parts Suppliers Stable September 2010
Adjusted Cost Bases And Solid Exports Offset Risk From Temporary Volume Drop
Auto Manufacturers Positive May 2010 Demand, pricing trends drive recovery, but speed bumps could lie ahead
Airlines Stable June 2010 Global airline sector stable on expectations of passenger, yield growth
Chemicals Stable May 2010 Industrial demand strengthens
Paper and Forest Stable March 2010 Product demand stable but subdued as challenges continue
Steel Producers Stable June 2010 Recovery on track but demand remains fragile
Shipping Stable February 2010 No longer off course, but oversupply will continue to hamper full recovery
Oil & Gas Stable June 2010 Global Integrated Oil Stable but Gulf Spill and Weak Natural Gas Add to Pressure
Telecoms & Cable Stable November 2009 Resilient, but revenue pressures persist
Retail Stable March 2010 Demand expected to remain subdued in 2010
6
CEE Corporates Amid Economic Turbulence
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Au
g-0
0
Au
g-0
1
Au
g-0
2
Au
g-0
3
Au
g-0
4
Au
g-0
5
Au
g-0
6
Au
g-0
7
Au
g-0
8
Au
g-0
9
Au
g-1
0
Au
g-1
1
Europe Actual Europe Baseline Forecast
Europe Pessimistic Forecast Europe Optimistic Forecast
7
Significant reduction of defaults expected in 2010
» Only 3 EMEA rated corporates defaulted in 2010
» Default rates in this downturn well below 2002 peak: no challenge to business models, corporates reacted quickly on capex and costs, refinancing needs were moderate.
» Default rate expected by model to go below 2% by year-end in Europe.
» Moody’s ratings have performed well while market-implied ratings overestimated defaults.
European HY 12 Months Default Rates (August / 2010)
CFG EMEA Corporates: Ratings of B1 and Below (August / 2010)
Source: Moody‘s Investors Service
0
10
20
30
40
50
B1 B2 B3 Caa1 Caa2 Caa3 Ca C
Total Number of Issuers Issuers with Neg Outlook / UR Down / No Outlook
Source: Moody‘s Investors Service
7
CEE Corporates Amid Economic Turbulence
Expectations for growth and output levels
Significant upward/downward risk stemming from economic rebound in markets
– GRIs are more exposed to sovereign credit…
– But public policies (spending, taxes, etc ) might affect corporates
– …Large multinationals benefit from geographic diversification
» Growth has direct impact on rating prospects of issuers active in these countries
» Issuers also indirectly impacted as sovereign risk may increase:
Source: Moody‘s Investors Service
8
CEE Corporates Amid Economic Turbulence
» Easing of negative pressure on GRIs in H2 but remaining challenges
– Negative pressure on some sovereign ratings
– Reassessment of some support assumptions (primarily Dubai and some others…)
Moody’s has adjusted a number of ratings due to revised support assumptions and sovereign downgrades
Government Related Issuers (GRI)
Number of Downgrades in EMEA
Source: Moody‘s Investors Service
0102030405060708090
1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010
GRI Non-GRI
July & August 2010
9
CEE Corporates Amid Economic Turbulence
Impact of Sovereign Weakness on EMEA Corporate Landscape
While market access has improved significantly, sovereign weakness could spill-over to corporates, restrict access to funding
Source: Moody‘s Investors Service
I mpact of Sover ei gn Weakness on Eur opean Cor por at es
SHORT TERM I MPACT MEDI UM TERM I MPACT LONG TERM I MPACT
Vol at i l i t y
Reduct i on of t he gr owt h t r aj ect or y
Depr essed consumer confi dence Gover nment expendi t ur e cut s
Tax i ncr eases
Access t o Fundi ng
Corporates that need short-term access to Capi tal
Markets and Bank Fundi ng
Tel ecommuni cati on Servi ces Provi dersUti l i t i esAutomoti ve
Al cohol i c Beverages and Tobacco
Al l I ndustri es
10
CEE Corporates Amid Economic Turbulence 11
Decreasing Borrowing Costs, but Investors Perception Evolves
Source: Moody‘s Economy.com
Capital market borrowing costs fall sharply (CFG sector) as financial conditions improve. We expect corporate bond yields to continue falling in 2011 as investors move out of low-return cash deposits and into higher-yielding corporate bonds
0
50
100
150
200
250
300
Jun07 Sep07 Dec07 Mar08 Jun08 Sep08 Dec08 Mar09 Jun09 Sep09 Dec09 Mar10 Jun10 Sep10
Banking Corporate Sovereign
Data as of 9/1/2010
CEE Corporates Amid Economic Turbulence
Refunding needs are significant over the intermediate term
European corporate funding needs coincide with a substantial increase in debt issuance by European sovereigns and banks
» Increasing competition for credit and higher volatility in funding costs
» Sovereign advantage to gradually return for nearly all countries, supported by an eventual recovery
2009 European Corporate Funding Needs (USD, billion)
CEE Corporates Amid Economic Turbulence
13
Western European Bond Issuance
» Issuance activity down in Q2 with investors being very selective
» Investors looking for yield, solid corporate business model, want to avoid exposure to challenged sovereign risks
» IG financing needs remain modest with recovered free cash-flow, reduced share buy-back activity, limited M&A and cautious capex programs
Issuance Volumes in Western European Bond Market Investment Grade in USD bn
Issuance Volumes in Western European Bond Market Speculative Grade in USD bn
Source: Moody‘s Economy.com
0
100
200
300
400
500
600
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Q1-
08
Q2-
08
Q3-
08
Q4-
08
Q1-
09
Q2-
09
Q3-
09
Q4-
09
Q1-
10
Q2-
10
Quarterly Breakdown
0
5
10
15
20
25
30
35
40
45
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Q1-
08
Q2-
08
Q3-
08
Q4-
08
Q1-
09
Q2-
09
Q3-
09
Q4-
09
Q1-
10
Q2-
10
Quarterly Breakdown
13
CEE Corporates Amid Economic Turbulence 14
CEE Region and its
Characteristics
CEE Corporates Amid Economic Turbulence 15
CEE: Convergence Revisited
» CEE region was particularly hit by the global crisis – due to its export-led, investment-led growth model.
» In 2009 however, CEE countries showed an impressive macroeconomic flexibility – both with respect to public finances and balance of payments.
» Many CEE countries have restored their competitiveness and are now in a favorable position to benefit from a global economic recovery.
» Overall, we have a constructive view on the region. We expect a resumption of convergence in most countries in 2010/ 2011.
» That said, the recovery in some countries is still fragile and to a large extent dependent on a supportive global environment.
CEE Corporates Amid Economic Turbulence 16
Economic Strength: Industrial Production
Industrial Production – Manufacturing (Index 2000=100), SA, Jan 2005 – Feb 2010
Source: Eurostat
70
80
90
100
110
120
130
140
150
160
170
20
05
M0
1
20
05
M0
4
20
05
M0
7
20
05
M1
0
20
06
M0
1
20
06
M0
4
20
06
M0
7
20
06
M1
0
20
07
M0
1
20
07
M0
4
20
07
M0
7
20
07
M1
0
20
08
M0
1
20
08
M0
4
20
08
M0
7
20
08
M1
0
20
09
M0
1
20
09
M0
4
20
09
M0
7
20
09
M1
0
20
10
M0
1
Bulgaria Czech Republic Estonia Latvia Lithuania
Hungary Poland Romania Slovakia Croatia
CEE Corporates Amid Economic Turbulence
CEE (I)
Slovenia (Aa2/STA): Debt Trajectories, 2007-13
0
2
4
6
8
10
12
14
20 30 40 50 60 70
Debt/GDP (%)
Inte
rest
Pay
men
t / R
even
ue
(%)
adverse scenario baseline scenario benign scenario
2008
2010
2011
2012
2009
20102013
2013
20122010
20122013
2007
Estonia (A1/NEG): Debt Trajectories, 2007-13
0
2
4
6
8
10
12
0 5 10 15 20 25 30
Debt/GDP (%)
Inte
rest
Pay
men
t / R
even
ue
(%)
Adverse scenario Baseline scenario Benign scenario
2008
2010
2011
2012
20092010 2013
2013
2012 2011
2013
2007
Latvia (Baa3/STA): Debt Trajectories, 2007-13
0
2
4
6
8
10
12
14
16
18
20
0 10 20 30 40 50 60 70 80
Debt/GDP (%)
Inte
rest
Pay
men
t / R
even
ue
(%)
adverse scenario baseline scenario benign scenario
2008
2010
2011
2012
2009 2010
2013
2013
2012 2011
20102011
2012
2013
2007
Poland (A2/STA): Debt Trajectories, 2007-13
3
5
7
9
11
13
15
40 45 50 55 60 65 70 75
Debt/GDP (%)
Inte
rest
Pay
men
t / R
even
ue
(%)
adverse scenario baseline scenario benign scenario
2008
2010
2011
2012
20092010
2013
2013
2012 2011
2010
20132007
17
CEE Corporates Amid Economic Turbulence
CEE (II)
Bulgaria (Baa3/POS): Debt Trajectories, 2007-13
0
1
2
3
4
5
4 6 8 10 12 14 16 18 20
Debt/GDP (%)
Inte
rest
Pay
men
t / R
even
ue
(%)
adverse scenario baseline scenario benign scenario
2008
2010
2011 2012
2009
2010
2013
2013
2012
20112011
2012
2013
2007
Russia (Baa1/STA): Debt Trajectories, 2007-13
0
1
2
3
4
5
6
2 4 6 8 10 12 14 16 18
Debt/GDP (%)
Inte
rest
Pay
men
t / R
even
ue
(%)
adverse scenario baseline scenario benign scenario
2008
20102011
2012
2009
2010
2013
2013
2012 2011
2010
20122013
2007
Ukraine (B2/NEG): Debt Trajectories, 2007-13
0
2
4
6
8
10
12
14
5 10 15 20 25 30 35 40 45 50
Debt/GDP (%)
Inte
rest
Pay
men
t / R
even
ue
(%)
adverse scenario baseline scenario benign scenario
2008
2010
2011
2012
2009
2010
2013
2013
2012
2011
2010
20112012
2013
2007
Romania (Baa3/STA): Debt Trajectories, 2007-13
0
2
4
6
8
10
12
10 15 20 25 30 35 40
Debt/GDP (%)
Inte
rest
Pay
men
t / R
even
ue
(%)
adverse scenario baseline scenario benign scenario
2008
2010
2011 2012
2009
2010
2013
2013
2012 2011
2012
20132007
18
CEE Corporates Amid Economic Turbulence 19
CEE: Convergence Revisited
Accession countries and new EU members´ income catch-up, 1997 - 2008
Source: Eurostat
1997 2000 2003 2006 2007 2008
EU-27 100.0 100.0 100.0 100.0 100.0 100.0
Czech Republic 72.9 68.5 73.4 77.4 80.2 80.1
Hungary 51.5 56.0 63.2 63.5 62.6 62.8
Poland 46.8 48.2 48.9 52.3 53.8 57.6
Slovakia 51.3 50.1 55.5 63.5 67.1 71.8
Turkey 32.1 39.9 33.9 42.6 44.9 45.7
Bulgaria 26.4 27.8 32.5 36.6 37.5 40.5
Croatia 52.0 49.2 54.3 58.4 61.1 63.1
Romania n.a. 26.1 31.3 38.3 42.4 45.8
Portugal 76.1 78.3 77.0 76.3 76.1 75.5
GDP per capita at PPP (EU-27 = 100)
CEE Corporates Amid Economic Turbulence
Sovereign rating list – Selection, Investment Grade
Bulgaria – the only country with positive outlook in CEE
20
CEE Corporates Amid Economic Turbulence
Examples of Moody’s rated entities in CEE
Quality of credit Moody's Example Gilt-edged Aaa Aa1 Very high Aa2 Slovenia, SID Banka Aa3 M6 Duna
INVESTMENT A1 Czech Rep., Slovakia, Estonia, Prague
GRADE Upper-medium A2 Poland, CEZ, PKO BP, Tatrabanka, Warsaw
A3 NLB, PGE, Telek. Polska, Abanka, Tallinn
Baa1Hungary, Lithuania, Abanka, Telco Slovenije, OTP
Medium grade Baa2 BVS, BPH Bank, MKB Bank, Bank Millennium
Baa3 Bulgaria, Croatia, Latvia, Romania,
Latvenergo, Transelectrica, Raiffeisen BG Ba1 MAV, PKN Orlen, Zagrebacka Banka
SPECULATIVE Questionable Ba2 MKB Unionbank
GRADE Ba3 Montenegro, RCS&RDS, Corp. Com. Bank
B1 Albania, CEDC, NWR, Norvik Banka, Veles
Poor quality B2 Bosnia, Agrokor, CME, Credins Bank, Privatbank
B3 Baltic Int. Bank, Trasta Komercbanka Caa1 Very poor or Caa2 in default Caa3 Petrol BG, Zlomrex Ca C
* As of November 2010
21
CEE Corporates Amid Economic Turbulence 22
How Moody’s Assess Corporates
Creditworthiness
CEE Corporates Amid Economic Turbulence 23
Moody’s Approach to Rate Corporates
3. Challenges/risks for corporate issuers going into 2010
Transparent methodology is key for Moody’s ratings
» Transparent methodologies
» Individual scorecards per industry employed
» Understandable for both issuers and investors
» But not the final rating
» See examples for Automotive Suppliers (next slide) and for Regulated Utilities (over next slide)
» For government related issuers (GRI) - so called Joint-Defauls-Analysis (JDA) in place
CEE Corporates Amid Economic Turbulence 24
Moody’s Approach to Rate Corporates – Auto suppliers (I)
3. Challenges/risks for corporate issuers going into 2010
Transparent methodology is key for Moody’s ratings
Source: Moody‘s Investors Service
CEE Corporates Amid Economic Turbulence 25
Moody’s Approach to Rate Corporates – Auto suppliers (II)
3. Challenges/risks for corporate issuers going into 2010
Transparent methodology is key for Moody’s ratings
Source: Moody‘s Investors Service
CEE Corporates Amid Economic Turbulence 26
Moody’s Approach to Rate Corporates – Regulated Utilities
3. Challenges/risks for corporate issuers going into 2010
Transparent methodology is key for Moody’s ratings
Source: Moody‘s Investors Service
CEE Corporates Amid Economic Turbulence
Government Related Issuer Ratings Inputs
BASELINE CREDIT
ASSESSMENT
SOVEREIGN DEFAULT
RISK
DEFAULT DEPENDENCE
LIKELIHOOD OF
GOVERNMENT SUPPORT
CREDIT
RATING
27
CEE Corporates Amid Economic Turbulence 28
Joint Default Analysis (“JDA”) – Example CEZ
BCA(*)
of CEZ:
7 (i.e. A3)
Likelihood of Support from State:
Medium (31-70%)
Local Currency Rating
of Czech Republic:
A1
Default Dependence between CEZ and Government:
Medium (31-70%)
Rating of CEZ:
A2 stable
(*)Baseline Credit Assessment
CEE Corporates Amid Economic Turbulence 29
Positioning of CEE Corporates
CEE Corporates Amid Economic Turbulence
Distribution of CEE Corporate Ratings
The proportion of issuers in the investment
grade (IG) range (Aaa-Baa) decreased from 54%
down to 45% as the economic recession
impacted also more stable utility industries
Most of CEE IG companies are state owned –
government ratings add rating volatility
High proportion of Caa-C ratings compared to
EMEA rating distribution suggests larger
proportion of potential defaulters in CEE rated
universe
30
Investment Grade – delayed impact of adverse economic developmentSpeculative Grade – stabilised but still vulnerable due to high proportion of Caa-C ratings
012345678
Aaa Aa A Baa Ba B Caa-C
CEE Corporate Rating Distribution
Dec-08 Jan-10
0%
10%
20%
30%
40%
Aaa Aa A Baa Ba B Caa-C
CEE versus EMEA Corporate Ratings Distribution
CEE EMEA
CEE Corporates Amid Economic Turbulence
Government Related Issuers (GRIs)Important Part of CEE Corporate Ratings
In many CEE markets, ratings and capital market
issuance driven by state sector in search of capital
(energy, railways, oil & gas...) – CEZ (CR), Eesti
Energia (EST)
High share of GRIs show importance of state and
limited preparedness of other players in tapping
capital markets
Regulatory environment and state support plays a
significant role in influencing financial profile of IG
issuers
For 40% of CEE government-related issuers, a
downgrade of the government rating would result in
GRI downgrade
31
GRIs represent 54% of overall CEE corporate rating universe and over 90% of investment-grade issuers
0
1
2
3
4
5
GRIs in CEE Rating Universe (as of January 2010)
GRI non GRI
0
1
2
3
4
5
6
7
Aaa Aa A Baa Ba B Caa-C
GRIs versus Private Companies - Rating Distribution(as of January 2010)
non GRI GRI
CEE Corporates Amid Economic Turbulence
EMEA
» Downgrades for Western European issuers outpaced upgrades since Q1 2008
» Sharp increase in downgrades from end 2008/beginning 2009 decelerated over H2 2009 and 2010
CEE
» 3 downgrades in CEE over 1998-2007
» 28 downgrades since Jan 2008
» 1 default (Kremikovtzi) and 1 filing for protection (Belvedere)
32
CFG EMEA Quarterly Upgrades and Downgrades
0
25
50
75
Upgrades Downgrades
2004 2005 2006 2007 2008 2009 9M 20100
5
10
15
20
25CEE Corporates: Up/Downgrades
UPGRADE DOWNGRADE
Downward pressure on corporate ratings is gradually easing
CEE Corporates Amid Economic Turbulence
Negative Outlooks Decreased but Positive News still to Come
» The proportion of CEE ratings with negative outlook decreased from 46% to 32% over 2010 reflecting stabilisation and easing of pressure on credit quality
» …while positive pressure remains uncertain as only 1 of CEE ratings is expected to face upward pressure (positive outlook)
33
0% 20% 40% 60% 80% 100%
CFG CEE Outlooks, October 2010
Stable Negative RUR D Positive
0% 20% 40% 60% 80% 100%
CFG CEE Outlooks, January 2010
Stable Negative RUR D Positive
CEE Corporates Amid Economic Turbulence 34
Major Drivers Influencing CEE Corporates
Large proportion of CEE corporates are GRIs – sensitive to sovereign ratings Expected negative development as 5 CEE countries have negative outlook on their
government rating
Impact of Sovereign Ratings Development
Reassessment of Business Plans to Preserve Liquidity Adaptation to changing environment – lower demand, weaker cash flows Readjustment of Capex plans, operational efficiencies, strengthening of capital
structure
Currency Volatility
Regulation and Government
Significant FX risk exposure due to high proportion of export Large foreign currency denominated debts creating significant FX exposure
Financial position dependent on high proportion of regulated income Governments as owners influence strategic decisions
CEE Corporates Amid Economic Turbulence 35
Q & A
© 2009 Moody’s Investors Service, Inc. and/or its licensors and affiliates (collectively, “MOODY’S”). All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY 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. 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. 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. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider of credit support for, each security that it may consider purchasing, holding or selling.
Moody’s Investors Service, Inc. (“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 www.moodys.com under the heading “Shareholder Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
Contact details:
Petr Vins
Head of CEE Branch
Central + (420) 224 222 929
Direct + (420) 221 666 312