Industry Credit Outlook Issuer Review Recent Rating Activity Contact Information Related Criteria And Research

Transcription

1 August 24, 2011 Industry Report Card: Declining Global Equity Markets Resulted In Moderate Profitability For Global Asset Managers In The Second Quarter Primary Credit Analyst: Charles D Rauch, New York (1) ; charles_rauch@standardandpoors.com Secondary Contacts: Sebnem Caglayan, New York (1) ; sebnem_caglayan@standardandpoors.com Dhruv Roy, London (44) ; dhruv_roy@standardandpoors.com Table Of Contents Industry Credit Outlook Issuer Review Recent Rating Activity Contact Information Related Criteria And Research 1

2 Industry Report Card: Declining Global Equity Markets Resulted In Moderate Profitability For Global Asset Industry Credit Outlook Global asset managers' second-quarter 2011 performance was relatively comparable to first-quarter 2011 despite the tumble in global equity prices during May and June. Assets under management (AUM) remained flat in this quarter for most asset managers. Higher inflows in fixed income products (especially in June) supported AUM, but market depreciation in equity products hampered it. Chart 1 Standard & Poor's Ratings Services' outlook on the industry remains stable, although we are becoming increasingly cautious given that global equity prices continued to slide during July and month-to-date August. If stock prices keep falling, we believe more global asset managers could begin to suffer net asset outflows. Should this occur, profitability during the second half of 2011 could wane. However, we believe the industry is in better financial Standard & Poor s RatingsDirect on the Global Credit Portal August 24,

3 shape to withstand potential economic and market storms than at the market peak in late 2007, before the global credit crisis. Aggregate AUM was $7.2 trillion at June 30, about $1.8 trillion, or 33.3%, more than the cyclical low of $5.4 trillion (adjusted for BlackRock's BGI purchase in December 2009) in first-quarter 2009 (U.S. managers only; see chart 1). Additionally, many asset managers, especially those heavily indebted, have restructured their balance sheets by reducing debt and extending debt maturities. A weaker equity market restrains AUM After rallying for three continuous quarters, equity prices weakened during May and June. Consequently, global asset managers witnessed depreciation in their equity portfolios as most stock markets across the globe declined marginally in this quarter. The S&P 500 index declined 0.4% during the second quarter. Similarly, the S&P 400 midcap index and the S&P 600 small cap index weakened 1% and 0.4%, respectively. The S&P 1500 composite stock index fell 0.45%. The Thomson Reuters/Jefferies CRB Index slumped 5.9%, primarily because of the fall in crude prices. The Investment Company Institute (ICI) reported $3.9 billion of net asset inflows into foreign equity mutual funds and $25.2 billion of net asset outflows from domestic equity mutual funds during second-quarter Stock markets outside the U.S. also reported a weak quarter. The S&P/TSX 60 index (Canadian dollar, C$), the S&P Europe 350 index (euro, ), and the MSCI World Index fell 5.6%, 1.3%, and 0.28%, respectively. But the MSCI EAFE index was up a marginal 0.3%. Alternatively, fixed income and other products were bright spots. The fixed-income markets recovered from the lows in the prior quarter. And deteriorating equity markets spurred investors to move to the fixed-income markets. The ICI reported $45.7 billion of net asset inflows to taxable and municipal bond funds during the three months ended June 30, The decline in equity prices during May and June restricted growth in the quarter. Aggregate AUM in the second quarter among rated North American asset managers remained flat relative to first-quarter Notable equity price depreciation in local markets particularly hurt Canadian asset managers. Although some asset managers witnessed net asset outflows in this quarter, others experienced lower asset inflows compared with the prior quarter. Exceptions included Affiliated Managers Group (AMG) and Franklin Resources, which reported improved net sales relative to the linked quarter. Franklin Resources led the way, reporting a quarter of stronger AUM growth relative to peers. The number of asset managers that experienced asset outflows increased this quarter, including BlackRock and Calamos, in addition to already-suffering Alliance Bernstein, Janus Capital, and Legg Mason. Profitability stayed flat Rated asset managers reported flat second-quarter performance, with revenues and profitability almost unchanged. For asset managers that reported second-quarter results, we estimate that aggregate revenues improved by a marginal 1.4%, whereas pretax income declined 0.5% from first-quarter Performance fee income and advisory-fee income increased marginally. Despite the slight rise in revenues, pretax margin for the industry was slightly lower at 28.2% from 28.7% in the first quarter (see chart 2). The corresponding pretax income-to-average AUM ratio was 13 basis points for second-quarter 2011, which remained flat compared with the first quarter. However, both profitability measures are significantly better than in the depths of the global credit crisis in first-quarter

4 Chart 2 The quarter's slightly lower profitability was primarily because AllianceBernstein, Janus Capital, and Eaton Vance posted lower operating margins. Calamos Asset Management, the sole manager of Calamos Holdings, led the pack with a second-quarter pretax operating margin of 42.3%. Franklin Resources reported a strong performance relative to peers', posting higher AUM and profitability. Cash flows from operations were adequate for almost all asset managers. During the second quarter, two asset managers--blackrock and GAMCO--issued debt, but key credit metrics remained consistent with existing ratings. BlackRock partially funded the Bank of America share buyback by issuing $2.0 billion of debt during the quarter. Share buybacks continued, most notably at Invesco Holding Co. and Waddell & Reed. These asset managers were able to buyback shares during the quarter and not affect their ratings because they have elevated cash levels on their respective balance sheets. For the rated European asset managers, second-quarter AUM was moderately higher as both investment returns and net flows held up against a backdrop of increased market volatility and uncertainty. However, net flows were muted relative to the same period last year. We expect 2011 flows to be less than prior-year levels as eurozone sovereign Standard & Poor s RatingsDirect on the Global Credit Portal August 24,

5 debt issues, uneven economic recovery, inflation, and geopolitical uncertainty continue to trouble investors. Despite these barriers to growth, European asset managers' move into higher-margin products and an increase in cost efficiencies broadly supported profitability in the first half of Similar to their North American counterparts, we expect European asset managers to continue to expand their overseas distribution capabilities and geographically diversify. Issuer Review Table 1 Company/Issuer Credit Rating/Comments Affiliated Managers Group Inc. (BBB-/Stable/A-3) AMG posted good results for second-quarter 2011 that, in some ways, exceeded our expectations. AUM rose 2.5% during the three months to $348 billion as of June 30, Net client asset inflows of $7.5 billion and $1.1 billion of market appreciation led the growth. This growth in AUM led to an 8.4% increase in revenues and a 12% increase in reported operating income. We estimate the EBITDA margin rose slightly to 30.6% in the second quarter from 29.0% in the first quarter. We estimate debt leverage was 2.0x, in line with the rating on the company. As a result of the turn-around in net asset flows and operating performance, we revised the outlook to stable from negative in June. We expect that when AMG makes an investment in a new affiliate, it will use more equity to finance the transaction than in the past, so debt leverage measures should return to current levels in less than three quarters. AllianceBernstein L.P. (AA-/Negative/A-1+) AllianceBernstein reported modest second-quarter results, with the AUM declining to $461 billion compared with $477.3 billion in the linked quarter. The decline was primarily because of continued net outflows of $19.5 billion, which completely offset market appreciation of $2 billion. Similar to prior quarters, the majority of the outflows was concentrated in the company s institutional channel ($14.9 billion), and comprised equity products ($23.5 billion). Net revenues declined 3.6% to $728 million, largely because of investment losses and lower revenues from its research services. Subsequently, the pretax income declined to $115.6 million from $138.4 million, and the resulting adjusted operating margin declined to 19.7% from 21.9% in the prior quarter. On June 1, 2011, we revised our outlook on AllianceBernstein to negative from stable, reflecting our opinion that continued net asset outflows in the short term could hurt the company's market position and profitability metrics. BlackRock Inc. (A+/Stable/A-1) BlackRock reported another good quarter, in line with our expectations. AUM was relatively flat at $3.66 trillion at June 30, compared with $3.65 trillion at March 31, During the quarter, AUM benefited from $12.1 billion of market appreciation, which was almost completely attributed to active and institutional index fixed-income products. However, $5.6 billion of net redemptions and $9.9 billion of BGI merger-related outflows offset market appreciation. Revenues were up slightly, partially because of one additional revenue day and other seasonal factors during the second quarter that provided a boost to investment advisory fees. The pretax operating margin was strong at 36.9%, up from 35.0% in the first quarter. During the second quarter, BlackRock repurchased $2.5 billion of Bank of America preferred stock by issuing $2.0 billion of debt and using $0.5 billion of cash to finance the transaction. Total debt equals $5.3 billion. Despite the higher debt level, BlackRock s debt leverage metrics are still consistent with the rating. Analyst Vikas Jhaveri Calamos Holdings LLC (BBB+/Stable/--) Calamos Asset Management Inc., the sole manager of Calamos Holdings, reported revenues of $92.2 million and operating income of $39.3 million for second-quarter AUM dipped 2% from the previous quarter to $37.4 billion. This marginal decline was due to market depreciation and net redemptions in the quarter. Asset segments like low-volatility equity, growth, and convertible saw outflows, whereas global and international strategies had modest inflows. Institutional business was roughly flat for the quarter. Investment performance remained strong with at least half of Calamos mutual funds ranking in the upper half of their respective Lipper categories across all time periods. Investment risk management remains sound. The operating margin increased to a robust 42.3% and remains among the strongest of our rated asset managers. We expect the company to continue its diversified AUM growth and to strengthen its balance sheet as it reduces debt. Chris Cary CI Financial Corp. (BBB+/Stable/--) CI Financial reported mediocre second-quarter results, with the total assets and AUM declining 1.6% sequentially to C$97.2 billion and C$74.3 billion, respectively. The decline in AUM was primarily because of market depreciation of C$1.5 billion, which completely offset net asset inflows of C$0.3 billion. Average AUM was flat relative to the linked quarter, at C$74.5 billion. Revenues declined marginally to C$385.5 million despite higher management fee income. The resultant pretax income margin for the quarter remained relatively flat at 35.2%. Debt remained moderately high at C$846.8 million. However, the company s EBITDA-to-interest and debt-to-ebitda ratios of 22.8x and 1.4x, respectively, at June 30, 2011, are adequate for the ratings. Cash and cash equivalents were also adequate at C$179 million. We expect a steady improvement in the company s operating performance in the remainder of Sebnem Caglayan 5

6 Eaton Vance Corp. (A-/Positive/A-2) Eaton Vance reported decent results for its fiscal third quarter ended July 31, 2011, but performance slipped slightly from the very strong results for the fiscal second quarter ended April 30, AUM was $199 billion, down 1.9% from the record $203 billion at fiscal second-quarter end. The sequential decline in AUM was mainly due to market depreciation in equity securities during July. Positively, net asset inflows continued during the fiscal third quarter, with $1.8 billion, primarily in separate accounts. Investment advisory and administration fees rose slightly during the quarter, but a rise in expenses more than offset the increase. Consequently, operating income declined by 1.2% to $115.6 million and the pretax operating margin eased six basis points but remained healthy at 35.3%. We expect the company will continue to generate net asset inflows while maintaining a very good liquidity profile and comparatively strong credit metrics. F&C Asset Management PLC (BBB-/Negative/A-3) F&C s first-half interim results were mixed but largely resilient, with AUM increasing to 108 billion at June 30, 2011, from billion at Dec. 31, However, the increase was due to market and foreign exchange movements with net inflows excluding insurance at 0.8 billion and net insurance asset outflows of 1.7 billion, leading to negative total net flows. Although revenues (net of fees and commission expenses) at 137 million were 28% more than the prior year, the pretax loss widened by 6% to 20.8 million, primarily because of an increase in variable compensation costs associated with the Thames River acquisition. We remain uncertain about the ongoing strategic review of the business (the company indicated that it would announce the outcome in October). In our view, although this strategic uncertainty has not significantly hampered fund flows, there remains material risk that prolonged uncertainty combined with continued market volatility could hurt confidence and business flows. Although F&C has somewhat improved its relatively weak financial profile, its balance sheet remains highly leveraged and debt service metrics are low relative to similarly rated asset managers. Any improvement is likely to be gradual and subject to continued progress on fund flows, profitability, and net debt reduction. Franklin Resources Inc. (AA-/Stable/A-1+) Franklin Resources operating performance during the fiscal third quarter ended June 30, 2011, was solid. AUM ended the quarter at $734.2 billion, a 4.4% increase from $703.5 billion at the end of the fiscal second quarter at March 31, The growth in AUM was mainly because of record net inflows of $21.7 billion, almost all of which was in fixed income, plus $9.6 billion of market appreciation. Investment performance within Franklin equity, Templeton equity, and taxable fixed income remains very strong. However, short-term (one year) investment performance within tax-free fixed income and the Mutual Series equity products is poor. The rise in AUM during the quarter helped drive a 6% increase in investment management fees and total revenues. The company generated 2% operating leverage quarter over quarter, which provided a small lift to the 36.8% pretax operating margin. Hefty cash balances and moderate debt are key factors supporting the ratings. Franklin is keeping its total (dividend plus share repurchase) payout ratio at about 51%. We expect Franklin s operating performance to remain strong as it continues to leverage its diversified global platform to expand its operations. Dhruv Roy GAMCO Investors Inc. (BBB/Stable/A-2) GAMCO posted decent second-quarter results, with AUM slightly increasing 2.1% quarter over quarter to $36.1 billion. The growth in AUM was primarily because of net inflows since market appreciation was immaterial at $57 million. Total revenue went up by $8.2 million sequentially, mainly as a result of a rise in investment advisory and incentive fees. Total expenses declined marginally by $2 million from the linked quarter. Consequently, operating margin after management fees increased to 35.8% from 27% in the prior quarter. With $261 million in cash and cash equivalents, liquidity is adequate and we expect it to remain decent. The company issued $100 million senior unsecured notes due 2021 during the quarter, bringing the total debt to $260.8 million. Nevertheless, the company s leverage and interest coverage metrics remain adequate for the rating. On-balance-sheet liquidity remains strong with $260.8 million in cash and cash equivalents at June 30, IGM Financial Inc. (A+/Stable/A-1) Compared with the previous quarter, IGM s second-quarter 2011 results (ended June 30) were adequate, with AUM declining 2.9% to C$130.2 billion after three quarters of steady growth. Market depreciation was the primary reason for the decline in the quarter s AUM, in addition to net redemptions of C$486 million compared with net sales of C$619 million in the previous quarter. Mutual fund AUM also dropped to C$108.6 billion, a 2.8% decline, and was steeper than the Canadian mutual fund industry average of 0.7%. Lower AUM led to a drop in revenues and pretax operating profitability. However, the pretax operating margin was robust at 39.9%, with good interest and debt coverage. We believe IGM's strong market position, earnings power, balance sheet, liquid investment holdings, financial flexibility, and prudent financial leverage will support its earnings. We expect IGM to continue to produce stable profitability and coverage ratios, mainly because of relatively stable AUM. Invesco Holding Co. Ltd. (A-/Stable/--) Invesco posted stable second-quarter results with AUM at $653.7 billion, marginally up by 1.8% ($11.8 billion) from the previous quarter. Market appreciation of $3.2 billion, long-term net flows of $3.8 billion, and positive inflows of $3.5 billion in institutional money market funds primarily led the rise in AUM. EBITDA margin is strong at 30.2%. Operating performance on a GAAP basis remained relatively stable since both operating revenues and expenses increased by a similar amount. Consequently, Invesco s operating margin on a GAAP basis remained essentially unchanged at 21.8%. As of June 30, 2011, the company had a total of $1.584 billion in debt. This corresponded to 1.22x debt-to-ebitda and 20.08x EBITDA-to-interest ratios, which we view as in line with the Sebnem Caglayan Foster Cheng Sebnem Caglayan Standard & Poor s RatingsDirect on the Global Credit Portal August 24,

7 rating. The company repurchased 11.3 million shares worth $279.9 million in the second quarter by drawing down on the credit facility. If the company continues to issue debt to repurchase shares, the ratings would come under pressure. We view Invesco s liquidity profile as strong, with $621.5 million cash and cash equivalents at the quarter s end. We expect Invesco to continue to exhibit good operating performance and strengthen its financial profile by paying down debt and rebuilding its tangible equity. Janus Capital Group Inc. (BBB-/Stable/A-3) Janus s second-quarter 2011 results were not particularly good. AUM was down 2% to $168.3 billion at June 30 from $172.0 billion at March 31, Janus suffered another quarter of net redemptions, which increased to $3.1 billion from $2.7 billion in first-quarter 2011 (and $1.3 billion in second-quarter 2010). Most disheartening is that five key Janus fundamental equity funds are seriously underperforming their benchmarks. This has led not only to net redemptions, but also to negative performance fees, which reduce total revenue. Furthermore, negative performance fees are likely to continue as more funds provide for such fees. Consequently, pretax operating income was down slightly to $81.8 million, and the pretax operating margin was 31.0%. Earlier this year, Janus deleveraged the balance sheet and pushed out debt maturities. The next major debt maturity is in Cash plus investment securities almost cover outstanding debt. This conservative balance sheet helps to support the ratings. Legg Mason Inc. (BBB/Stable/--) Legg Mason posted less-than-adequate fiscal first-quarter results, with AUM declining 2.2% sequentially to $662.5 billion, primarily Sebnem because of continued liquidity and equity asset outflows. Operating revenues were marginally higher from the prior quarter, with an Caglayan $8 million increase in funds advisory fees, which a $3 million decline in distribution and service fees partly offset. Operating expenses remained essentially unchanged from the sequential quarter and included $13.7 million of transition-related costs related to the firm s streamlining initiatives. Consequently, operating margin remained flat at 14%, which is weak compared with peers. At June 30, 2011, the company had a total of $1.4 billion of debt and $1.2 billion in cash and cash equivalents. On June 23, 2011, we lowered the counterparty credit rating on the company to BBB from BBB+ based on continued asset outflows in the past three fiscal years, which have hurt both the company s market position and its financial metrics. We expect the company to continue to operate at similar profitability and financial metrics for the remainder of fiscal MIPL Holdings Ltd. (BB/Stable/--) Mondrian had a good second-quarter 2011 and remains on target for its 2011 performance projections. During the quarter, the company successfully issued a $440 million senior secured term loan and used the proceeds to buyout Hellman & Friedman s 27.6% equity stake in Mondrian. Cash flow from operating activities continues to be solid and the company s cash balance as of June 30, 2011, was strong. AUM increased 3.6% to $77.1 billion quarter over quarter--22.2% year over year. Quarterly inflows and outflows were largely balanced, which means that the AUM increase was mainly a result of market appreciation and currency impact.. Beginning in third-quarter 2011 and as a result of the debt issuance, approximately $5.5 million in quarterly interest expenses will hamper Mondrian s bottom line. The increased leverage is reflected in the ratings. Daniel Koelsch Nuveen Investments Inc. (B-/Stable/--) Nuveen s second-quarter financial performance was good. AUM rose to $210.8 billion at June 30, up 2.3% from $206.1 billion at March 31. Net asset inflows of $3.7 billion and market appreciation of $1.0 billion drove the AUM growth. Nuveen continues to benefit from solid investment performance in both mutual funds and managed accounts. Total revenues (excluding the consolidation of the variable interest entities) rose 5.8% to $260 million. Income before taxes turned positive during the second quarter after being negative for several years. Par value of outstanding debt is very high at nearly $3.9 billion. We estimate EBITDA interest coverage remains poor at 1.4x and the debt-to-ebitda multiple was 8.4x (based on annualized second-quarter EBITDA), still very high but less than the 10.0x for full-year Nuveen was in compliance with the debt covenants on its senior secured debt facility as of the end of the quarter. Despite Nuveen s strong business profile, the company s high debt remains a major factor in the ratings. Schroders PLC (A/Positive/A-1) Schroder s half-year results ending June 30, 2011, were broadly in line with our expectations. Weak intermediary (retail) net flows were 0.4 billion (versus 5.1 billion in the first half of 2010) given continued market volatility and relatively strong institutional flows of 4.6 billion that were a result of multiasset, equities, and fixed income. AUM at the end of June 30, 2011, stood at billion (up 4.1% from billion at year-end 2010), and pretax profit of million was 14.6% higher than the first half of Investment performance remained resilient with 77% of funds outperforming over three years. The positive outlook reflects our view of the underlying strength of the franchise as we expect that--notwithstanding near-term volatility--schroders will continue to strengthen its business profile while maintaining a strong balance sheet. Schroders has no debt in issuance, good liquidity, and a strong tangible equity base, and we expect these supportive rating factors to continue. Waddell & Reed Financial Inc. (BBB+/Stable/A-2) WDR posted stable second-quarter results, with a net income of $49.9 million, up 9% from the linked quarter. WDR s operating margin remains strong at 25.5%. AUM rose 1.86% sequentially and 34.37% year over year to $91.7 billion. The slight quarterly improvement in the AUM was mainly because of net flows of $1.7 billion, particularly in the wholesale channel, but market depreciation of $41 million slightly offset the improvement. As of June 30, 2011, for one year, three years, and five years, 80%, 63%, and 81%, respectively, of WDR s assets were in the top half of the Lipper rankings. We view WDR s financial profile as fairly conservative. With total debt of $190 million outstanding, the company s debt-to-ebitda ratio was at 0.53x at June 30, We view the company s EBITDA-to-interest coverage at 31.4x for the six months ended June 30, 2011, as one of the best compared with Dhruv Roy Sebnem Caglayan 7

8 its rated asset manager peers. Capital and liquidity metrics remain adequate, despite the firm buying back shares worth $38 million in the second quarter. We expect WDR to continue to demonstrate a solid financial profile while maintaining good net flows and low redemption rates. *Ratings as of Aug. 23, Recent Rating Activity Table 2 Recent Rating/Outlook/CreditWatch Actions* Company To From Date Affiliated Managers Group BBB-/Stable/A-3 BBB-/NegativeA-3 June 9, 2011 AllianceBernstein L.P. AA-/Negative/A-1+ AA-/Stable/A-1+ June 1, 2011 Legg Mason Inc. BBB/Stable/-- BBB+/Negative/-- June 23, 2011 MIPL Holdings Ltd. BB/Stable/-- NR June 14, 2011 *Actions taken since last report card dated May 31, NR--Not rated. Contact Information Table 3 Contact Information Credit Analyst Location Telephone Sebnem Caglayan New York (1) sebnem_caglayan@standardandpoors.com Chris Cary New York (1) chris_cary@standardandpoors.com Foster Cheng Toronto (1) foster_cheng@standardandpoors.com Robert Hoban, Jr. New York (1) robert_hoban@standardandpoors.com Vikas Jhaveri New York (1) vikas_jhaveri@standardandpoors.com Daniel Koelsch Toronto (1) daniel_koelsch@standardandpoors.com New York (1) charles_rauch@standardandpoors.com Dhruv Roy London +44(0) dhruv_roy@standardandpoors.com Related Criteria And Research 2011 Midyear Outlook: Global Financial Institutions Face Increasing Regulations Amid an Uneven Recovery, July 27, 2011 The Implications Of The U.S. Debt Ceiling Standoff For Global Financial Institutions, July 21, 2011 The U.S. Financial Industry Is Mostly Well Positioned For Rising Interest Rates, June 23, 2011 First-Quarter Profitability For Global Asset Managers Was Moderate Despite A Surge In The Equity Markets, May 31, 2011 Standard & Poor s RatingsDirect on the Global Credit Portal August 24,

9 Copyright 2011 by Standard & Poors Financial Services LLC (S&P), a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved. No content (including ratings, credit-related analyses and data, 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 S&P. The Content shall not be used for any unlawful or unauthorized purposes. S&P, its affiliates, 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, 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) in connection with any use of the Content even if advised of the possibility of such damages. Credit-related analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. 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's opinions and analyses do not address the suitability of any security. S&P does not act as a fiduciary or an investment advisor. 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. 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 credit-related 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, (free of charge), and and (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 9