M Moody's Review Of Pohjola Bank

Transcription

1 Credit Opinion: Pohjola Bank plc Global Credit Research - 17 Feb 2012 Helsinki, Finland Ratings Category Moody's Rating Outlook Rating(s) Under Review Bank Deposits *Aa2/P-1 Bank Financial Strength **C- Issuer Rating *Aa2 Senior Unsecured *Aa2 Subordinate *Aa3 Jr Subordinate *A1 (hyb) Pref. Stock Non-cumulative *Baa1 (hyb) Commercial Paper -Dom Curr P-1 Other Short Term -Dom Curr (P)P-1 Parent: OP-Pohjola Group Outlook Rating(s) Under Review Bank Financial Strength *B- * Placed under review for possible downgrade on August 10, 2011 ** Placed under review for possible downgrade on February 15, 2012 Contacts Analyst Phone Oscar Heemskerk/London Richard (Blake) B. Foster/London Simon Harris/London Anton Mahkats/London Key Indicators Pohjola Bank plc (Consolidated Financials)[1] [2]9-11 [2]12-10 [2]12-09 [2]12-08 [2]12-07 Avg. Total Assets (EUR million) 41, , , , ,903.0 [3]12.2 Total Assets (USD million) 55, , , , ,871.5 [3]9.8 Tangible Common Equity (EUR million) 1, , , [3]14.7 Tangible Common Equity (USD million) 2, , , , ,431.5 [3]12.2 Net Interest Margin (%) [4]0.7 PPI / Avg RWA (%) [5]2.3 Net Income / Avg RWA (%) [5]1.3 (Market Funds - Liquid Assets) / Total Assets (%) [4]22.4 Core Deposits / Average Gross Loans (%) [4]38.1 Tier 1 Ratio (%) [5]11.1 Tangible Common Equity / RWA (%) [5]9.8 Cost / Income Ratio (%) [4]67.0 Problem Loans / Gross Loans (%) [4]1.4 Problem Loans / (Equity + Loan Loss Reserves) (%) [4]6.7 Source: Moody's [1] All ratios are adjusted using Moody's standard adjustments [2] Basel II; IFRS [3] Compound Annual Growth Rate based on

2 IFRS reporting periods [4] IFRS reporting periods have been used for average calculation [5] Basel II & IFRS reporting periods have been used for average calculation Opinion RECENT CREDIT DEVELOPMENTS On 10 August 2011, Moody's placed on review for downgrade Pohjola Bank's Aa2 debt and deposit ratings following the review for downgrade of the BFSR of its parent, OP-Pohjola Group. This review was extended following Moody's announcement on February to place a number of European banks on review for downgrade, reflecting the multiple challenges we consider these banks face, notably (1) a weakening macroeconomic environment; (2) costly and constrained market funding; and (3) pressure on profits. In addition to this, Pohjola Bank's C- bank financial strength rating (BFSR) was placed on review for downgrade given Pohjola Bank's high reliance on market funding and high concentration risks (mainly related to real estate). These challenges may lead us to reduce our assessment of several important rating factors, notably economic stability, franchise value, risk positioning, liquidity, profitability and capital. In light of this, Our current expectation is that any downgrade of the bank's rating would likely be limited to 2 notches. For more details please see our reports "Why Global Bank Ratings are Likely To Decline In 2012", "Euro Area Debt Crisis Weakens Bank Credit Profiles" and "European Banks: How Moody's Analytic Approach Reflects Evolving Challenges", published on January 19, SUMMARY RATING RATIONALE Pohjola Bank plc is rated Aa2/P-1/C- (on review for downgrade). The C- BFSR (on review for downgrade) of Pohjola Bank plc (previously OKO Bank plc), which translates into a baseline credit assessment (BCA) of Baa1, reflects the bank's strong national franchise and high reported market shares in corporate banking in Finland, its sound risk and liquidity management as well as the good asset quality in its loan book. The BFSR is constrained by the bank's credit concentration risks and high reliance on market funding. Pohjola Bank is the main subsidiary of the Finnish co-operative banking group, OP-Pohjola Group (previously OP Bank Group), to which we assign a BFSR of B- (on review for downgrade), translating into to a BCA of A1. Pohjola Bank is a corporate banking arm of OP-Pohjola Group, and accounts for around 20% of the group's total loan portfolio. The bank fully owns Pohjola Insurance ltd, to which we assign an A2 insurance financial strength rating (on review for downgrade). Pohjola Bank's long term global local currency (GLC) deposit rating is Aa2, based on (i) its Baa1 BCA; (ii) a joint and several guarantee from OP-Pohjola Group; and (iii) our assessment that the probability of systemic support for Pohjola Bank in the event of need is very high. Consequently, there is a five-notch uplift for Pohjola Bank's GLC deposit rating from its Baa1 BCA. Credit Strengths - Strong domestic franchise in corporate banking and strong brand name recognition in Finland - Benefits from a joint and several liability guarantees agreed among the co-operative member banks of OP-Pohjola Group and itself - Sound risk and liquidity management practices - Strong group-wide integration of bank and non-life insurance operations provides benefit from cross-selling Credit Challenges - Preserving asset quality in the weakened economic environment - High borrower concentration and exposure to real estate related sectors - High reliance on short term wholesale funding, given that Pohjola bank acts as treasury for the whole OP-Pohjola Group and that the majority of the group's deposits are sourced by the cooperative banks - Volatility in earnings reflecting mark-to-market volatility Rating Outlook The Aa2 debt and deposit ratings of Pohjola Bank were placed on review for possible downgrade on 10 August 2011 following the review for downgrade of the BFSR of its parent, OP-Pohjola Group.

3 On February 15, Moody's decided to extend the review to incorporate the pressures from the European operating environment. During the extended review Moody's will consider the impact on the bank's standalone creditworthiness of weakening fundamentals, notably economic stability, franchise value, risk positioning, liquidity, profitability and capital, in the context of the current environment. In addition to this, Pohjola Bank's C-/Baa1 stand-alone ratings were placed on review on 15 February reflecting Pohjola Bank's high reliance on market funding and high concentration risks (mainly related to real estate). Moody's notes that Pohjola Bank's long-term debt and deposit ratings continue to reflect unquestioned co-operative group support from OP-Pohjola Group, which takes the form of a joint and several guarantee. The rating also factors in the continuing importance of the bank to the Finnish banking system and Moody's assessment that the probability of systemic support for the bank remains very high. What Could Change the Rating - Up The bank's ratings are on review for downgrade and we therefore do not see any meaningful upwards rating pressure at present and over the immediate rating horizon. What Could Change the Rating - Down The BFSR could be downgraded following our review period during which we will re-assess the impact of (i) a weakening macroeconomic environment; (ii) costly and constrained market funding; and (iii) pressure on profits, as well as considering the bank's economic stability, franchise value and risk positioning in the current environment. Our current expectation is that any downgrade of the bank's rating would likely be limited to 2 notches Recent Results and Company Events Pohjola bank reported pre-tax profit of EUR 258 million in 2011 down from EUR 308 million in Operating expenses increased year on year, but, positively, net interest income increased to EUR 276 million in 2011 from EUR 258 million in Loan impairments decreased to EUR 60 million in 2011 from EUR 104 million in At the end of December 2011 Pohjola Bank's Tier 1 and total capital adequacy ratios as calculated under Basel II transitional rules both stood at 10.6% (12.5% and 13.3% at YE2010). DETAILED RATING CONSIDERATIONS Detailed considerations for Pohjola Bank currently assigned ratings are as follows: Bank Financial Strength Rating The C- BFSR assigned to Pohjola Bank is one notch below the outcome of Moody's financial strength scorecard and the C- BFSR is more consistent with our assessment of the bank's ability to sustain the incremental loan loss impairments expected under our baseline stress assumptions at its current capital level. The BFSR is currently on review for downgrade reflecting Moody's concerns that the bank's financial fundamentals could deteriorate beyond a level compatible with the current rating. During the review period Moody's will reassess the bank's strengths and weaknesses under the BFSR scorecard, in line with the recently published reports referenced under "Recent Credit Developments". Qualitative Rating Factors (50%) Factor 1: Franchise Value Pohjola Bank's franchise value is underpinned by its strong domestic market position in corporate banking - it reports a market share of around 20% in corporate lending. It is also a leading player in non-life insurance, reporting a market share of around 28%. The bank also benefits from being part of OP-Pohjola Group, which is a leading banking group in Finland and has a wide customer base. The bank's Series K shares (21% of shares with 58% of votes) are owned by OP-Pohjola Group's entities and its cooperative group members, and the Series A shares are publicly traded. The co-operative member banks that belong to the OP-Pohjola Group are independent, owned by their members and together enjoy a strong nationwide market share in retail banking. As Pohjola insurance has been further integrated in the co-operative group, sharing offices with the bank, cross selling has become more successful. Moody's publishes a separate credit opinion on Pohjola Insurance Ltd. Pohjola Bank is organised into three segments - Banking Services, Asset Management and Non-Life Insurance. Of these business segments, banking generated over 45% of total pre-tax profits in 2010.

4 The bank is responsible for OP-Pohjola Group's liquidity management and international operations. Under the Cooperative Bank Act, OP-Pohola Group's Central Cooperative, Pohjola Bank, Helsinki OP Bank, Op-Kotipankki Oyj, OP Mortgage Bank and the member cooperative banks together are jointly responsible for liabilities of members being in liquidation that cannot be met by the relevant member's funds. According to the Cooperative Banking Act, insurance companies cannot be included in the joint and several guarantees. However, given that insurance product sales are complementary to OP-Pohjola Group's financial services offering, in time it is possible that life and non-life insurance will become so integrated that they could be difficult to separate. In light of these factors, the overall score for Pohjola Bank's franchise value is D+. Pohjola Bank's franchise value may be undermined by pressures on funding availability and profitability coupled with a deteriorating macroeconomic environment. Franchise value will be one of the factors on which we will focus over the review period, particularly with a view to the longer-term sustainability of the franchise and of core earnings stability. Factor 2: Risk Positioning Overall, Pohjola Bank's risk management practices are good and closely integrated with those of OP-Pohjola Group. OP-Pohjola Group Central Co-operative is in charge of controlling and supervising all member banks' (including Pohjola Bank's) risk management and capital adequacy. Specific requirements have to be met in terms of credit, market and other risks. If these are not met, the Central Co-operative can take necessary action to safeguard the group's risk profile. The bank's IRB model was approved by the Finnish FSA in September The IRB model is also used in the credit approval process and in the pricing of exposures. High single-name exposures put a cap on the assessment of risk management for the bank. Pohjola Bank's market risk appetite is moderate and mostly related to fixed-income securities. The bank's equity and currency positions are limited. However, the bank is also exposed to market volatility via its insurance business. The investment portfolio of non-life insurance is divided between bonds (71% at end-2010), listed and unlisted equities (12%), and other investments. For information on asset quality and liquidity see below. In light of these factors, the overall score for Pohjola Bank's risk positioning is C-. The main constraint on the score is Moody's assessment of a high credit risk concentration, a feature we see in many Nordic banks. Factor 3: Regulatory Environment Moody's assessment of Finland's regulatory environment does not address bank-specific issues; instead, it evaluates whether or not regulatory bodies are independent and credible, demonstrate enforcement powers and adhere to global standards of best practices for risk control. Refer to Moody's latest Banking System Outlook on Finland to obtain a detailed discussion of the regulatory environment. Factor 4: Operating Environment This factor is common to all Finnish banks. Our assessment of a bank's operating environment is based on a measurement of economic stability, the power and efficiency of the legal system and the level of integrity in the country's business culture. The score for Finland's operating environment is B+. Refer to Moody's latest Banking System Outlook on Finland for a detailed discussion of the bank's domestic operating environment. Quantitative Rating Factors (50%) Factor 5: Profitability With its focus on corporate banking and non-life insurance, Pohjola bank's core profitability exceeds that of the wider OP- Pohjola Group. Risk-weighted recurring earnings power remained stable at 3% in 2010 (3% in 2009 and 1.2% in 2008), compared to 1.7% in 2010 for the group (1.6% in 2009 and 1.1% in 2008). In 2010, the bank's pre-tax income was reported at EUR 308 million, which is a solid improvement from the EUR 265 million corresponding figure reported in Improved results in 2010 largely reflected an increase in net interest income, net fees and commissions income as well as an improvement in investment income (from an investment income loss in 2009). Net insurance income decreased slightly in In addition to an improvement in core earnings the bank also decreased its loan impairments which also had a positive effect on net income. The increase in net interest income was mainly due to a 10% increase in the loan book in Net interest margins have been

5 stable around 0.75%, reflecting a low interest rate environment in Finland as well as strong competition. The improved investment income is mainly related to capital gains in bonds and notes. Costs have remained under control. Insurance income accounted for around 40% of operating income during 2010, while net interest income comprised around 30% and fees and commissions income for around 18%. For more information on the insurance income, see our separate credit opinion on Pohjola Insurance Ltd. Income from asset management operations increased by approx. 50% in 2010 and amounted just below 10% of the bank's pre-tax income. The decrease in impairments and positive developments in core earnings resulted in an improvement in net profitability in 2010 to 1.8% from 1.6% of average risk weighted assets. However, the low interest rate environment combined with strong competition may have a negative impact on net earnings going forward. The profitability ratios on the scorecard are expressed in relation to average Basel ll risk-weighted assets. Based on Pohjola Bank's 2010 profitability our scorecard indicates a B score. Since the final score is determined by a three year average, providing a longer time view, the score for the bank's profitability is D+. In addition, we believe, there will be further pressure on the bank's profitability, given our expectation of a continued weak macro-economic environment in Europe in the short to medium term. Factor 6: Liquidity As OP-Pohjola Group's central financial institution, Pohjola Bank has the central banking and treasury role for the OP-Pohjola Group. Therefore the bank is responsible for securing sufficient liquidity in the Group and manages on its balance sheet a liquidity portfolio amounting to around 11% of the Group's banking assets. At year-end 2010, the liquidity portfolio amounted to around 25% of Pohjola Bank's assets. Liquid assets in the bank beyond the assets held on behalf of the group account for around 20% of the bank's total assets. The liquidity reserve comprises largely government bonds, senior bonds of financial institutions as well as covered bonds; nearly 98% of assets are ECB eligible. Pohjola Bank has limited access to deposits (only around 15% of total funding) as it has no retail customer base, unlike the cooperative member banks in the OP-Pohjola Group. The bank's deposits mainly comprise excess liquidity from the co-operative member banks and corporate deposits, as retail deposits are included in the OP-Pohjola Group's balance sheet. The majority of the bank's funding, almost 65%, is market funding, and interbank funding represented 15% of funding at yearend We note that almost two thirds of interbank funding is represented by deposits from the cooperative banks. A significant part of the market funding is short term but we note that the bank is trying to address this. The high proportion of market funding, mitigated by Pohjola Bank's prudent liquidity management, leads to an overall liquidity score of D+. However, during the review will assess the impact of the additional pressures that the issuer may face as a result of the persistent fragility of overall investor confidence. Factor 7: Capital Adequacy Pohjola Bank's capital adequacy ratios have remained relatively solid despite strong growth in loans and guarantees, which have caused risk-weighted assets to increase. Since end-september 2008, the bank has used the IRB approach to measure its capital adequacy for credit risk. For now, this only applies to corporate exposures, which account for two-thirds of the bank's capital requirements. At year-end 2010, Pohjola Bank's Tier 1 and total capital adequacy ratios were 12.5% and 13.3%, respectively. Pohjola Bank's minimum Tier 1 ratio target is 9.5%. Pohjola Bank's Tier 1 capital includes EUR 274 million or 16% of hybrids which are assessed based on their relative debt and equity characteristics and assigned to a particular hybrid basket giving Pohjola additional equity credit ranging from 0%-50%. Excluding hybrid capital, Tier 1 ratio stood at 10.5%. For Pohjola Bank, the capital adequacy score is A. We nonetheless expect the weaker macro-economic environment in Europe will put further pressure on the bank's profitability and ultimately on capital adequacy, Factor 8: Efficiency

6 In 2010, Pohjola Bank's efficiency remained stable at 56% in 2010, reflecting the bank's banking and insurance operations. The cost-to-income in the Pohjola Banking division stood at 35% against a target of 40%. We expect Pohjola Bank to continue keeping expenditure under control. The bank's efficiency score, based on 3-year average, is D. The neutral trend reflects our expectation that the bank will take steps to meet its long term target of mitigating pressures on earnings. Factor 9: Asset Quality Pohjola Bank mainly has corporate exposures and therefore may be more vulnerable to a weakened macroeconomic environment than a bank with exposure to the retail market. The bank's corporate loan portfolio increased by 6.5% in 2010 after a slight contraction in The bank exhibits very high borrower concentration risk. The exposure by industry sector is, however, less concentrated, with the largest exposures related to 1) Renting and operating of residential real estate, 2) Manufacture of machinery and equipment (incl. services) and 3) Wholesale and retail trade, some of which are, however, vulnerable during an economic downturn. Moody's key concerns relate to the bank's exposure to the real estate and construction sector, which together accounted for EUR 5.6 billion or about 34% of the corporate exposure at year-end As a mitigant, real estate sector related exposure includes a significant portion of housing associations related exposures, which have shown better performance than other real estate related exposures. Moreover, at year-end 2010, EUR 937 million or 49% of the EUR 1.9 billion exposure to Renting and operating of residential real estate benefits from guarantees from the government, cities or municipalities and EUR 302 million or 21% of the exposure to renting and operation of other real estate is guaranteed by government, cities or municipalities. In addition to this, the bank's leveraged finance portfolio and structured portfolio may also carry higher risk. Positively, Moody's notes that Pohjola Bank's exposure to Baltic countries remains negligible, accounting for less than 1% of the bank's loan and guarantee portfolio. Pohjola Bank's asset quality deteriorated slightly in 2010 as evidenced by problem loans (defined as impaired and not-impaired doubtful receivables i.e. non-performing, zero-interest, under-priced and other doubtful receivables) increasing to 2.9% from 2.3% in Loan loss reserves cover around 56% of problem loans. Pohjola Bank scores C+ for asset quality when looking at a three-year average. Global Local Currency Deposit Rating (Joint Default Analysis) Moody's assigns a GLC deposit rating of Aa2 (on review for downgrade) to Pohjola Bank plc. The GLC rating is supported by: (i) the bank's BCA of Baa1; (ii) the joint liability from the members of OP-Pohjola Group, the BCA of which is A1; and (iii) the Aaa local currency deposit ceiling of Finland. Finland and OP-Pohjola Group are the underlying support providers. In view of Pohjola Bank's important market position and importance to the country's payments system, Moody's assigns a very high probability of systemic support for the bank in the event of a stress situation. This, along with the unquestioned support from OP-Pohjola Group, results in a five-notch uplift for the GLC deposit rating from the Baa1 BCA. Notching Considerations The ratings for the bank's hybrid obligations are notched off the BCA according to "Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt" released on 17 November On 28 November 2011, Moody's placed the bank's subordinated and junior subordinated debt ratings under review for downgrade. This reflects Moody's view that the probability of systemic support for subordinated debt in Europe is lower than assumed in the past, in light of potential legislative changes, including the European Commission's proposed framework on resolution regimes, which would allow the imposition of losses on subordinated debt holders outside a bankruptcy. Foreign Currency Deposit Rating The Aa2/P-1 foreign currency deposit ratings of Pohjola Bank (on review for downgrade) are unconstrained given that Finland, in common with other EU members, has a country ceiling of Aaa. Foreign Currency Debt Rating The Aa2/P-1 foreign currency debt ratings of Pohjola Bank (on review for downgrade) are unconstrained given that Finland, in common with other EU members, has a country ceiling of Aaa. ABOUT MOODY'S BANK RATINGS Bank Financial Strength Rating

7 Moody's Bank Financial Strength Ratings (BFSRs) represent Moody's opinion of a bank's intrinsic safety and soundness and, as such, exclude certain external credit risks and credit support elements that are addressed by Moody's Bank Deposit Ratings. BFSRs do not take into account the probability that the bank will receive such external support, nor do they address risks arising from sovereign actions that may interfere with a bank's ability to honor its domestic or foreign currency obligations. Factors considered in the assignment of BFSRs include bank-specific elements such as financial fundamentals, franchise value, and business and asset diversification. Although BFSRs exclude the external factors specified above, they do take into account other risk factors in the bank's operating environment, including the strength and prospective performance of the economy, as well as the structure and relative fragility of the financial system, and the quality of banking regulation and supervision. Global Local Currency Deposit Rating A deposit rating, as an opinion of relative credit risk, incorporates the BFSR as well as Moody's opinion of any external support. Specifically, Moody's Bank Deposit Ratings are opinions of a bank's ability to repay punctually its deposit obligations. As such, they are intended to incorporate those aspects of credit risk relevant to the prospective payment performance of rated banks with respect to deposit obligations, which includes: intrinsic financial strength, sovereign transfer risk (in the case of foreign currency deposit ratings), and both implicit and explicit external support elements. Moody's Bank Deposit Ratings do not take into account the benefit of deposit insurance schemes which make payments to depositors, but they do recognize the potential support from schemes that may provide assistance to banks directly. According to Moody's joint default analysis (JDA) methodology, the global local currency deposit rating of a bank is determined by the incorporation of external elements of support into the bank's Baseline Credit Assessment. In calculating the Global Local Currency Deposit rating for a bank, the JDA methodology also factors in the rating of the support provider, in the form of the local currency deposit ceiling for a country, Moody's assessment of the probability of systemic support for the bank in the event of a stress situation and the degree of dependence between the issuer rating and the Local Currency Deposit Ceiling. National Scale Rating National scale ratings are intended primarily for use by domestic investors and are not comparable to Moody's globally applicable ratings; rather they address relative credit risk within a given country. A Aaa rating on Moody's National Scale indicates an issuer or issue with the strongest creditworthiness and the lowest likelihood of credit loss relative to other domestic issuers. National Scale Ratings, therefore, rank domestic issuers relative to each other and not relative to absolute default risks. National ratings isolate systemic risks; they do not address loss expectation associated with systemic events that could affect all issuers, even those that receive the highest ratings on the National Scale. Foreign Currency Deposit Rating Moody's ratings on foreign currency bank obligations derive from the bank's local currency rating for the same class of obligation. The implementation of JDA for banks can lead to high local currency ratings for certain banks, which could also produce high foreign currency ratings. Nevertheless, it should be noted that foreign currency deposit ratings are in all cases constrained by the country ceiling for foreign currency bank deposits. This may result in the assignment of a different, and typically lower, rating for the foreign currency deposits relative to the bank's rating for local currency obligations. Foreign Currency Debt Rating Foreign currency debt ratings are derived from the bank's local currency debt rating. In a similar way to foreign currency deposit ratings, foreign currency debt ratings may also be constrained by the country ceiling for foreign currency bonds and notes; however, in some cases the ratings on foreign currency debt obligations may be allowed to pierce the foreign currency ceiling. A particular mix of rating factors are taken into consideration in Rating Factors Pohjola Bank plc Rating Factors [1] A B C D E Total Score Trend Qualitative Factors (50%) C Factor: Franchise Value D+ Neutral Market Share and Sustainability x Geographical Diversification x Earnings Stability x Earnings Diversification [2] Factor: Risk Positioning C- Neutral

8 Corporate Governance [2] - Ownership and Organizational Complexity - Key Man Risk - Insider and Related-Party Risks Controls and Risk Management x - Risk Management x - Controls x Financial Reporting Transparency x - Global Comparability x - Frequency and Timeliness x - Quality of Financial Information x Credit Risk Concentration x - Borrower Concentration x - Industry Concentration x Liquidity Management x Market Risk Appetite x Factor: Operating Environment B+ Neutral Economic Stability x Integrity and Corruption x Legal System x Financial Factors (50%) C Factor: Profitability D+ Neutral PPI / Average RWA - Basel II 2.00% Net Income / Average RWA - Basel II 0.97% Factor: Liquidity D+ Neutral (Mkt funds-liquid Assets) / Total Assets 23.31% Liquidity Management x Factor: Capital Adequacy A Neutral Tier 1 Ratio - Basel II 11.23% Tangible Common Equity / RWA - Basel II 9.70% Factor: Efficiency D Neutral Cost / Income Ratio 71.14% Factor: Asset Quality C+ Neutral Problem Loans / Gross Loans 2.06% Problem Loans / (Equity + LLR) 10.23% Lowest Combined Score (15%) D+ Economic Insolvency Override Neutral Aggregate Score C Assigned BFSR C- [1] - Where dashes are shown for a particular factor (or sub-factor), the score is based on non public information [2] - A blank score under Earnings diversification or Corporate Governance indicates the risk is neutral 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES 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

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