REQUEST
FOR COMMENT
CREDIT STRATEGY AND STANDARDS
AUGUST 25, 2022
Table of Contents:
SUMMARY
1
IMPACT ON RATINGS
2
HOW TO SUBMI
T COMMENTS 2
PROPOSED METHODOLOGY ADDITIONS
4
MOODY’S RELATED PUBLICATIONS
7
Analyst Contacts:
NEW YORK
+1.212.553.1653
David Gonzales
+1.212.553.9398
Vice President - Senior Accounting Analyst
david.gonzal[email protected]
Kevyn Dillow
+1.212.553.0596
Vice President - Senior Accounting Analyst
kevyn.dillow@moodys.com
Dean Diaz
+1.212.553.4332
Associate Managing Director
LONDON
+44.20.7772.5454
Philip Robinson
+44.20.7772.5425
Vice President - Senior Credit Officer
philip.robinson@moodys.com
Alastair Drake
+44.20.7772.1899
Senior Vice President –
Senior Accounting Analyst
alastair.d[email protected]
William Coley
+44.20.7772.8799
Managing Director –
Global Ratings & Process Oversight
william.coley@moodys.com
MADRID +34.91.768.8200
Marina Albo
+34.91.768.8311
Managing Director -EMEA Corporate Finance
marina.albo@moodys.com
» contacts continued on the (second to) last page
Financial Statement Adjustments in the
Analysis of Non-Financial Corporations:
Proposed Methodology Update
Summary
In this Request for Comment, we propose a number of changes to the Financial Statement
Adjustments in the Analysis of Non-Financial Corporations Methodology published in March 2021.
The key proposed revisions to the current cross-sector methodology are as follows:
» Standardize an adjustment that reclassifies the add-back of amortization of non-
intangible assets from FFO to changes in other operating assets and liabilities or
working capital. We propose that amortization of assets other than intangible assets that is
reported in the reconciliation of operating cash flow as a non-cash add-back would be
reclassified from funds from operations (FFO) to changes in other operating assets and
liabilities or changes in working capital, depending on the nature of the asset being
amortized. The add-back of amortization of intangible or capital assets acquired through
investing activities, appropriately belongs in FFO.
» Standardize an adjustment that adds the full value of financial guarantees reported on
the guarantor’s balance sheet to debt. We propose that any financial guarantees that are
reported on the balance sheet would be adjusted to debt at the full value of the guarantee
because the inclusion of such guarantees as balance sheet liabilities indicates a risk of future
cash outflow for the guarantor.
» In the non-standard adjustments section, add an example of a sector-based non-
standard adjustment to replace, in EBIT, the equity method income or loss with cash
distributions for REITs and other commercial real estate firms that report under
International Financial Reporting Standards (IFRS). We propose to add an example to the
non-standard adjustments section of a sector-based non-standard adjustment to replace, in
EBIT, equity method income or loss with cash distributions by using a non-standard
adjustment to reclassify the non-cash portion to unusual and non-recurring items, for REITs
and other commercial real estate firms that report under IFRS, specifically IAS 40
(Investment Properties). IFRS allows companies to include changes in the fair value of
investment properties in the income statement, which for associates and joint ventures is
included within equity method income or loss.
THIS REQUEST FOR COMMENT WAS REPUBLISHED ON AUGUST 29, 2022. WE CORRECTED A
TYPOGRAPHICAL ERROR ON PAGE 4.
REQUEST FOR
COMMENT - CLOSED
CREDIT STRATEGY AND STANDARDS
2 AUGUST 25, 2022
REQUEST FOR COMMENT: FINANCIAL STATEMENT ADJUSTMENTS IN THE ANALYSIS OF NON-FINANCIAL
CORPORATIONS —
PROPOSED METHODOLOGY UPDATE
The potential for wide variations in the fair values of investment properties held by REITs and other
commercial real estate firms reporting under IFRS may create volatility in reported equity method
income or loss and create EBIT metrics that are less comparable across firms. We have historically
made this non-standard adjustment for most entities reporting under IFRS in this sector.
For sectors other than REITs and other commercial real estate firms, we propose to follow a standard
treatment, which is to include equity method income or loss in adjusted EBIT.
» In the non-standard adjustments section, add an example of a non-standard adjustment to
exclude, from EBIT, the income or loss attributable to non-controlling interests for entities
where the integral role that the non-controlling shareholders play in the company’s business
increases the likelihood of regular cash distributions. We propose to add an example to the non-
standard adjustments section of a non-standard adjustment to exclude, from EBIT, income or loss
attributable to non-controlling interests by reclassifying it to other expenses for sectors where
distributions to non-controlling shareholders are considered highly likely due to the integral role of
these non-controlling shareholders in the company’s business. An example is a healthcare consolidator
of physician practices in the private healthcare sector. The integral role that the physicians practices
(the non-controlling shareholders) have in the businesses in which these private healthcare companies
invest, makes regular equity distributions more likely and akin to core operating costs.
We also propose to make some editorial changes to enhance readability.
Impact on Ratings
If this methodology is updated as proposed, we expect few, if any, changes to outstanding ratings.
This expected rating impact only reflects the methodological changes noted above and does not
incorporate potential impact from other factors, including prevailing market conditions or factors specific to
a particular issuer or transaction, such as financial metrics or qualitative considerations, that may be
relevant to the rating analysis.
This publication does not announce
a credit rating action. For any credit
ratings referenced in this
publication, please see the
issuer/deal page on
ratings.moodys.com
for the most
updated credit rating action
information and rating history.
REQUEST FOR
COMMENT - CLOSED
CREDIT STRATEGY AND STANDARDS
3 AUGUST 25, 2022
REQUEST FOR COMMENT: FINANCIAL STATEMENT ADJUSTMENTS IN THE ANALYSIS OF NON-FINANCIAL
CORPORATIONS —
PROPOSED METHODOLOGY UPDATE
How to Submit Comments
In this Request for Comment, we are seeking feedback on our proposed revisions to the Financial Statement
Adjustments in the Analysis of Non-Financial Corporations Methodology. The text of the proposed
methodology changes follows. Prior to publication of the revised methodology, we may also consider other
changes to the methodology as a result of the consultation process and our internal review.
We invite market participants to comment on the Request for Comment by September 26, 2022, no later
than 11:59 p.m. US Eastern time, by submitting comments on the Request for Comment page at
https://ratings.moodys.com. Upon appropriate consideration of received comments, we plan to adopt and
publish a revised Financial Statement Adjustments in the Analysis of Non-Financial Corporations Methodology.
REQUEST FOR
COMMENT - CLOSED
CREDIT STRATEGY AND STANDARDS
4 AUGUST 25, 2022
REQUEST FOR COMMENT: FINANCIAL STATEMENT ADJUSTMENTS IN THE ANALYSIS OF NON-FINANCIAL
CORPORATIONS —
PROPOSED METHODOLOGY UPDATE
Proposed Methodology Changes
Non-Intangible Asset Amortization Reported within Funds from Operations
The Reporting Issue
FFO
1
is a non-GAAP metric that we define as operating cash flow before changes in working capital and
changes in other short-term and long-term operating assets and liabilities. Due to the lack of specific
accounting guidance on the presentation of items within the reconciliation of operating cash flow in an
indirect method cash flow statement, companies may present as amortization changes in asset balances
that we consider are more accurately classified as changes in other short-term and long-term assets and
liabilities or changes in working capital. Most commonly, this is presented as amortization of an operating
asset, such as a right of use asset in US GAAP, or non-cash amortization. This has the effect of increasing
reported FFO. Amortization of intangible or capital assets acquired through investing activities should be
included in the calculation of FFO, but all other items characterized as amortization are changes relating to
operating assets and should therefore be reclassified from FFO to changes in other short-term and long-
term assets and liabilities or changes in working capital.
Our Analytical Response
When reported as an add-back above a company’s changes in other operating assets and liabilities and
changes in working capital, we reclassify amortization of operating assets (non-intangible amortization)
from FFO to changes in other operating assets and liabilities or changes in working capital (i.e., remove from
FFO), depending on the nature of the asset being amortized.
How We Adjust the Financial Statements
The following exhibit describes our adjustment for non-intangible asset amortization:
EXHIBIT
1
Non
-Intangible Asset Amortization
Balance Sheet
No adjustments made.
Income
Statement
No adjustments made.
Cash Flow Statement
»
Decrease other operating cash flow, increase changes in other operating assets and
liabilities or changes in working capital by the amount of non-intangible amortization.
Source: Moody’s Investors Service
1
This reporting issue can also apply to cash flow from operations before changes in working capital if an asset within working capital is being amortized, but we
expect this circumstance to be rare.
REQUEST FOR
COMMENT - CLOSED
CREDIT STRATEGY AND STANDARDS
5 AUGUST 25, 2022
REQUEST FOR COMMENT: FINANCIAL STATEMENT ADJUSTMENTS IN THE ANALYSIS OF NON-FINANCIAL
CORPORATIONS —
PROPOSED METHODOLOGY UPDATE
Classification of On-balance Sheet Financial Guarantees
2
The Reporting Issue
Financial guarantees entered into by companies are reported on the balance sheet at fair value. The vast
majority of financial guarantees are typically issued on behalf of related parties and rarely reach a fair value
material enough to be classified as liabilities on the guarantor’s balance sheet due to the low likelihood of
default by the guaranteed party. Financial guarantees material enough to be on the balance sheet indicate a
risk of future cash outflow for the guarantor, and we therefore include such guarantees as debt at the full
value of the guarantee, even if full value exceeds fair value.
Our Analytical Response
We add the full value of on-balance sheet guarantees to debt.
How We Adjust the Financial Statements
The following exhibit describes our adjustment for on-balance sheet guarantees:
EXHIBIT
2
On
-balance Sheet Guarantees
Balance Sheet
»
Reduce other liabilities by the fair value of the on-balance sheet guarantee and increase
debt by the full amount.
Income Statement
»
We remove any gains or losses due to recording or revaluing these liabilities from the
income statement.
Cash Flow Statement
»
In the event of an operating cash outflow being reported, we would reclassify this
outflow as a financing outflow.
Source: Moody’s Investors Service
Non-Standard Adjustments
Replacement of Equity Method Income or Loss in EBIT with Cash Distributions for REITs and Other
Commercial Real Estate Firms
Companies with non-consolidated investments in other entities that use the equity method of accounting
report equity method income or loss on the income statement. We typically include this income or loss in
adjusted EBIT. The inclusion of equity method income or loss provides a standard quantitative starting point
for income statement metrics and incorporates the risks and benefits of these unconsolidated investments
into our credit analysis. For REITs and other commercial real estate firms that report under IFRS, specifically
IAS 40 (Investment Property), the equity method income or loss may be volatile due to the accounting for
underlying investment properties at fair value, which may contribute to wide variations in reported EBIT that
make comparisons across firms difficult. For this reason, for REITs and other commercial real estate firms
that report under IFRS, we typically replace, in EBIT, equity method income or loss with cash distributions by
using a non-standard adjustment to reclassify the non-cash portion to unusual and non-recurring items.
2
Off-balance sheet financial guarantees as well as non-financial guarantees on- or off-balance sheet are evaluated as debt-like on a case-by-case basis using a non-
standard adjustment where necessary.
REQUEST FOR
COMMENT - CLOSED
CREDIT STRATEGY AND STANDARDS
6 AUGUST 25, 2022
REQUEST FOR COMMENT: FINANCIAL STATEMENT ADJUSTMENTS IN THE ANALYSIS OF NON-FINANCIAL
CORPORATIONS —
PROPOSED METHODOLOGY UPDATE
Exclude, from EBIT, Income or Loss Attributable to Non-Controlling Interests for Entities
Where the Integral Role that the Non-Controlling Shareholders Play in the Company’s Business
Increases the Likelihood of Regular Cash Distributions.
A controlling entity that owns one or more non-wholly owned subsidiaries allocates a share of net income
or loss to minority equity holders as non-controlling interest. Typically, we include income or loss
attributable to non-controlling interests in the controlling entity’s EBIT. It is not viewed as an operating
expense, and any distributions to the non-controlling shareholders are reflected in the cash flow statement.
However, for entities where the non-controlling shareholders play an integral role in the business and a
regular dividend flow to them provides a remuneration-like return, we typically use a non-standard
adjustment to exclude, from EBIT, the income or loss attributable to these non-controlling shareholders by
reclassifying it to other expenses. An example of where we make this non-standard adjustment is for
physician practices in the private healthcare sector, which are often acquired as small businesses, and in
which the practices’ physicians are the non-controlling shareholders. Although the accounting in these
instances may classify the physicians as equity holders, their integral role to the businesses makes the
distribution akin to core operating costs (such as physician compensation) instead of a capital return.
REQUEST FOR
COMMENT - CLOSED
CREDIT STRATEGY AND STANDARDS
7 AUGUST 25, 2022
REQUEST FOR COMMENT: FINANCIAL STATEMENT ADJUSTMENTS IN THE ANALYSIS OF NON-FINANCIAL
CORPORATIONS —
PROPOSED METHODOLOGY UPDATE
Moody’s Related Publications
Cross-sector credit rating methodologies are typically applied in tandem with sector credit rating
methodologies, but in certain circumstances may be the basis for assigning credit ratings. A list of sector and
cross-sector credit rating methodologies can be found here.
For data summarizing the historical robustness and predictive power of credit ratings, please click here.
For further information, please refer to Rating Symbols and Definitions, which is available here.
REQUEST FOR
COMMENT - CLOSED
CREDIT STRATEGY AND STANDARDS
8 AUGUST 25, 2022
REQUEST FOR COMMENT: FINANCIAL STATEMENT ADJUSTMENTS IN THE ANALYSIS OF NON-FINANCIAL
CORPORATIONS —
PROPOSED METHODOLOGY UPDATE
» contacts continued from page 1
Analyst Contacts:
PARIS
+33.1.5330.1020
Jean-Michel Carayon
+33.1.5330.1063
Senior Vice President
jean-[email protected]
Yasmina Serghini
+33.1.5330.1064
Managing Director -Corporate Finance
yasmina.sergh[email protected]
NEW YORK
+1.212.553.1653
Kenneth Emery
+1.212.553.4415
Senior Vice President/RPO
kenneth.emery@moodys.com
Mariarosa Verde
+1.212.553.6949
Senior Vice President/RPO
mariarosa.v[email protected]
Suzanne Wingo
+1.212.553.0571
Senior Vice President/Mgr/RPO
suzanne.wing[email protected]
HONG KONG
+852.3758.1300
Castor Choy
+852.3758.1315
Vice President -Senior Accounting Analyst
castor.choy@moodys.com
REQUEST FOR
COMMENT - CLOSED
CREDIT STRATEGY AND STANDARDS
9 AUGUST 25, 2022
REQUEST FOR COMMENT: FINANCIAL STATEMENT ADJUSTMENTS IN THE ANALYSIS OF NON-FINANCIAL
CORPORATIONS —
PROPOSED METHODOLOGY UPDATE
Author
Geordie Thompson
Report Number:
1336159
ADDITIONAL CONTACTS:
Frankfurt:
+49.69.2222.7847
Madrid:
+34.91.414.3161
Milan:
+39.02.3600.6333
Paris:
+33.1.7070.2229
© 2022 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 CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF E
NTITIES, CREDIT
COMMI
TMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY,
“PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS C
ONTRACTUAL FINANCIAL
OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S R
ATING SYMBOLS AND
DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRES
SED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS
DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT R
ATINGS, NON-CREDIT
ASSESSMENTS (“ASSESSMENTS”), AND OTHER 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. AND/OR ITS AFFILIATES. MOODY’S
CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE
INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT
PROVIDE
RECOMMENDATIONS TO PURCHASE, SEL
L, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO
NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS A
ND OTHER OPINIONS
AND PU
BLISHES ITS 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,
ASSESSMENTS, OTHER OPINIONS, AND 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
, ASSESSMENTS, OTHER OPINIONS OR 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 INFORMATI
ON MAY BE COPIED OR
OTHERWISE REPRODUCED, REPACKAGED, FURT
HER 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 C
ONSENT.
MOODY’S CRED
IT RATINGS
,
ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR
REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All infor
mation contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possib
ility 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 its 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 o
f 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, willfu
l 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 AN
Y PARTICULAR PURPOSE OF ANY CREDIT RATING,
ASSESSMENT, 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, p
rior to assignment of any credit rating, agreed to pay to Moody’s
Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $5,
000,000. MCO and Moody’s Investors Service also maintain policies
and procedures to address the independence of Moo
dy’s Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of
MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and have a
lso 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 docum
ent 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 wil
l 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 t
he 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.
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, d
ebentures, notes and commercia
l paper) and preferred stock rated by
MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) fo
r credit ratings opinions and services rendered by it fees ranging from
JPY100,000 to approxi
mately JPY550,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.
REQUEST FOR
COMMENT - CLOSED
