Transcript P.Vins_Moody`s_CEE Corporatesx

CEE Corporates Amid Economic Turbulence
Stabilisation of credit quality during 2010
Petr Vins, Branch Manager, CEE
ICAP, Sofia, December 2010
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
2
Moody’s Outlook for Corporates
in 2010 and towards 2011
(sectors, GRIs)
CEE Corporates Amid Economic Turbulence
3
1. Outlook for 2010
Moody’s global macroeconomic risk scenario
On the “Hook” for some time yet
Global Marco-Economic and Credit Conditions
» 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)
Source: Moody‘s Investors Service
2010
as per 05/09
as per 09/09
as per 01/10
France
0.0 / 1.0
0.5 / 1.5
1.0 / 2.0
Germany
-0.5 / 0.5
0.5 / 1.5
1.2 / 2.2
Italy
-0.5 / 0.5
0.0 / 1.0
0.5 / 1.5
UK
-0.5 / 0.5
0.5 / 1.0
1.0 / 2.0
USA
1.0 / 2.0
1.5 / 2.5
2.0 / 3.0
Russia
1.5 / 2.5
1.5 / 2.5
2.0 / 3.0
China
7.5 / 8.5
8.0 / 9.0
8.5 / 9.5
Japan
0.0 / 1.0
0.0 / 1.0
1.0 / 2.0
= upward revision from previous forecast
= downward revision from previous forecast
as per 07/10
1.0 / 2.0
1.2 / 2.2
0.5 / 1.5
0.5 / 1.5
2.5 / 3.5
4.0 / 5.0
9.5 / 10.5
1.5 / 2.5
2011
as per 01/10 as per 07/10
1.5 / 2.5
1.5 / 2.5
1.5 / 2.5
1.5 / 2.5
1.0 / 2.0
1.0 / 2.0
2.0 / 3.0
2.0 / 3.0
2.5 / 3.5
2.5 / 3.5
4.0 / 5.0
4.0 / 5.0
8.5 / 9.5
8.5 / 9.5
1.0 / 2.0
1.5 / 2.5
A sluggish recovery continues to be the most likely global macro-economic scenario
CEE Corporates Amid Economic Turbulence
4
Downward pressure on corporate ratings is
gradually easing
CFG EMEA Quarterly Upgrades and Downgrades
75
50
25
0
Upgrades
Downgrades
Source: Moody‘s Investors Service
Note: includes multiple actions per issuer
Negative pressure softened since H2 2009
moving towards stabilization
CEE Corporates Amid Economic Turbulence
5
Moody’s Outlook for Key Sectors
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
Moody’s has stabilised most cyclical industry outlooks over the past few
months, but issuers may retain negative outlooks due to specific challenges
CEE Corporates Amid Economic Turbulence
6
7
Significant reduction of defaults expected in 2010
European HY 12 Months
Default Rates (August / 2010)
CFG EMEA Corporates: Ratings
of B1 and Below (August / 2010)
Europe Actual
Europe Baseline Forecast
Europe Pessimistic Forecast
Europe Optimistic Forecast
50
Total Number of Issuers
Issuers with Neg Outlook / UR Down / No Outlook
40
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
30
20
10
0
Source: Moody‘s Investors Service
B2
B3
Caa1
Caa2
Caa3
Ca
C
Aug-11
Aug-10
Aug-09
Aug-08
Aug-07
Aug-06
Aug-05
Aug-04
Aug-03
Aug-02
Aug-01
Aug-00
B1
Source: Moody‘s Investors Service
» 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.
CEE Corporates Amid Economic Turbulence
7
Expectations for growth and output levels
» Growth has direct impact on
rating prospects of issuers
active in these countries
» Issuers also indirectly impacted
as sovereign risk may increase:
– GRIs are more exposed to
sovereign credit…
– But public policies (spending,
taxes, etc ) might affect
corporates
– …Large multinationals benefit
from geographic diversification
Source: Moody‘s Investors Service
Significant upward/downward risk
stemming from economic rebound in markets
CEE Corporates Amid Economic Turbulence
8
Government Related Issuers (GRI)
Number of Downgrades in EMEA
90
80
70
60
50
40
30
20
10
0
1Q 2009
2Q 2009
3Q 2009
Source: Moody‘s Investors Service
4Q 2009
GRI
1Q 2010
2Q 2010
July & August 2010
Non-GRI
» 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
CEE Corporates Amid Economic Turbulence
9
Impact of Sovereign Weakness on EMEA Corporate
Landscape
Impact of Sovereign Weakness on European Corporates
SHORT TERM IMPACT
Volatility
Corporates that need shortterm access to Capital
Markets and Bank Funding
Source: Moody‘s Investors Service
MEDIUM TERM IMPACT
Reduction of the growth
trajectory
Depressed consumer confidence
Government expenditure cuts
Tax increases
Telecommunication Services
Providers
Utilities
Automotive
Alcoholic Beverages and
Tobacco
LONG TERM IMPACT
Access to Funding
All Industries
While market access has improved significantly, sovereign weakness could spill-over to
corporates, restrict access to funding
CEE Corporates Amid Economic Turbulence
10
Decreasing Borrowing Costs, but Investors Perception Evolves
Banking
Corporate
Sovereign
300
250
200
150
100
50
0
Jun07
Sep07 Dec07 Mar08 Jun08 Sep08 Dec08 Mar09 Jun09
Sep09 Dec09 Mar10
Jun10
Sep10
Data asof 9/ 1/ 2010
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
CEE Corporates Amid Economic Turbulence
11
Refunding needs are significant over the
intermediate term
2009 European Corporate Funding Needs (USD, billion)
»
Increasing competition for credit and higher volatility in funding costs
»
Sovereign advantage to gradually return for nearly all countries, supported by an eventual
recovery
European corporate funding needs coincide with a substantial increase in
debt issuance by European sovereigns and banks
CEE Corporates Amid Economic Turbulence
13
Western European Bond Issuance
Issuance Volumes in Western European
Bond Market Investment Grade in USD bn
600
Issuance Volumes in Western European
Bond Market Speculative Grade in USD bn
45
40
500
Quarterly Breakdown
Quarterly Breakdown
35
400
30
25
300
20
200
15
10
100
5
0
Q2-10
Q1-10
Q4-09
Q3-09
Q2-09
Q1-09
Q4-08
Q3-08
Q2-08
Q1-08
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Q2-10
Q1-10
Q4-09
Q3-09
Q2-09
Q1-09
Q4-08
Q3-08
Q2-08
2009
Q1-08
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
Source: Moody‘s Economy.com
» 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
CEE Corporates Amid Economic Turbulence
13
CEE Region and its
Characteristics
CEE Corporates Amid Economic Turbulence
14
CEE: Convergence Revisited
»
CEE region was particularly hit by the global crisis – due to its export-led, investmentled 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
15
Economic Strength: Industrial Production
Industrial Production – Manufacturing (Index 2000=100), SA, Jan 2005 – Feb 2010
170
160
150
140
130
120
110
100
90
80
Bulgaria
Czech Republic
Estonia
Latvia
Lithuania
Hungary
Poland
Romania
Slovakia
Croatia
2010M01
2009M10
2009M07
2009M04
2009M01
2008M10
2008M07
2008M04
2008M01
2007M10
2007M07
2007M04
2007M01
2006M10
2006M07
2006M04
2006M01
2005M10
2005M07
2005M04
2005M01
70
Source: Eurostat
CEE Corporates Amid Economic Turbulence
16
CEE (I)
Estonia (A1/NEG): Debt Trajectories, 2007-13
20
30
40
50
60
70
0
Debt/GDP (%)
2
2008
2013
2009
2010
2007
4
2010
6
2012
2012
2013
2010
2011
2012
8
2013
10
12
adverse scenario
baseline scenario
benign scenario
14
Interest Payment / Revenue (%)
Interest Payment / Revenue (%)
Slovenia (Aa2/STA): Debt Trajectories, 2007-13
0
50
55
60
65
70
75
3
5
2008
Debt/GDP (%)
2007
7
2013
2009
9
2010
2010
2010
2011
2012
2011
2013
11
2012
13
2013
adverse scenario
15
baseline scenario
15
20
25
30
2011
2007 2008
2009
2010
2012
2013
2013
2011
2012
4
2013
Debt/GDP (%)
6
8
10
Adverse scenario
Baseline scenario
Benign scenario
12
Latvia (Baa3/STA): Debt Trajectories, 2007-13
benign scenario
Interest Payment / Revenue (%)
Interest Payment / Revenue (%)
45
10
2010
2
Poland (A2/STA): Debt Trajectories, 2007-13
40
5
0
0
10
20
30
40
50
2008
Debt/GDP (%)
60
70
80
0
2
4
2007
2010
2009
2010
6
2010
8
2012
2011
2012
2011
2013
2011
2013
10
12
2012
14
2013
16
18
adverse scenario
baseline scenario
benign scenario
20
CEE Corporates Amid Economic Turbulence
17
CEE (II)
Russia (Baa1/STA): Debt Trajectories, 2007-13
4
6
8
10
12
14
16
18
20
0
Debt/GDP (%)
1
2013
2013
2
2012
2008
2012
2007
2009
2011
2011
3
2013
2010
2012 2011
2010
4
adverse scenario
baseline scenario
benign scenario
5
Interest Payment / Revenue (%)
Interest Payment / Revenue (%)
Bulgaria (Baa3/POS): Debt Trajectories, 2007-13
2
15
20
25
30
35
Debt/GDP (%)
2008
2
2007
2013
4
2012
6
2013
2012
2011
2009
2010 2010
2011
8
2012 2013
10
adverse scenario
12
baseline scenario
benign scenario
40
8
10
12
14
16
18
Debt/GDP (%)
2007
2013
2012
2
2013
2011
2012
2011
2010
2009
2010
3
2010
2012
4
2013
5
adverse scenario
baseline scenario
benign scenario
6
Ukraine (B2/NEG): Debt Trajectories, 2007-13
Interest Payment / Revenue (%)
Interest Payment / Revenue (%)
10
6
2008
1
Romania (Baa3/STA): Debt Trajectories, 2007-13
0
4
0
5
10
0
2
15
20
2008
25
30
35
40
45
50
Debt/GDP (%)
2007
2009
2010
4
2010
2011
2012
6
2013
8
2010
2011
2012
2011
10
2013
2012
12
2013
14
adverse scenario
baseline scenario
benign scenario
CEE Corporates Amid Economic Turbulence
18
CEE: Convergence Revisited
Accession countries and new EU members´ income catch-up, 1997 - 2008
GDP per capita at PPP (EU-27 = 100)
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
Source: Eurostat
CEE Corporates Amid Economic Turbulence
19
Sovereign rating list – Selection, Investment Grade
 Bulgaria – the only country with positive outlook in CEE
CEE Corporates Amid Economic Turbulence
20
Examples of Moody’s rated entities in CEE
Quality of credit
Moody's
Gilt-edged
Aaa
Very high
Aa1
Aa2
Aa3
Slovenia, SID Banka
A1
Czech Rep., Slovakia, Estonia, Prague
A2
Poland, CEZ, PKO BP, Tatrabanka, Warsaw
A3
NLB, PGE, Telek. Polska, Abanka, Tallinn
INVESTMENT
GRADE
Upper-medium
Baa1
Medium grade
SPECULATIVE
Questionable
GRADE
Poor quality
Very poor or
in default
Example
M6 Duna
Hungary, Lithuania, Abanka, Telco Slovenije,
OTP
Baa2
BVS, BPH Bank, MKB Bank, Bank Millennium
Baa3
Bulgaria, Croatia, Latvia, Romania,
Ba1
MAV, PKN Orlen, Zagrebacka Banka
Ba2
MKB Unionbank
Ba3
Montenegro, RCS&RDS, Corp. Com. Bank
B1
Albania, CEDC, NWR, Norvik Banka, Veles
B2
Bosnia, Agrokor, CME, Credins Bank, Privatbank
B3
Baltic Int. Bank, Trasta Komercbanka
Caa1
Caa2
Caa3
Ca
C
Petrol BG, Zlomrex
Latvenergo, Transelectrica, Raiffeisen BG
* As of November 2010
CEE Corporates Amid Economic Turbulence
21
How Moody’s Assess Corporates
Creditworthiness
CEE Corporates Amid Economic Turbulence
22
3. Challenges/risks for corporate issuers going into 2010
Moody’s Approach to Rate Corporates
» 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
Transparent methodology is key for Moody’s ratings
CEE Corporates Amid Economic Turbulence
23
3. Challenges/risks for corporate issuers going into 2010
Moody’s Approach to Rate Corporates – Auto suppliers (I)
Source: Moody‘s Investors Service
Transparent methodology is key for Moody’s ratings
CEE Corporates Amid Economic Turbulence
24
3. Challenges/risks for corporate issuers going into 2010
Moody’s Approach to Rate Corporates – Auto suppliers (II)
Source: Moody‘s Investors Service
Transparent methodology is key for Moody’s ratings
CEE Corporates Amid Economic Turbulence
25
3. Challenges/risks for corporate issuers going into 2010
Moody’s Approach to Rate Corporates – Regulated Utilities
Source: Moody‘s Investors Service
Transparent methodology is key for Moody’s ratings
CEE Corporates Amid Economic Turbulence
26
Government Related Issuer Ratings Inputs
LIKELIHOOD OF
GOVERNMENT SUPPORT
BASELINE CREDIT
CREDIT
SOVEREIGN DEFAULT
ASSESSMENT
RATING
RISK
DEFAULT DEPENDENCE
CEE Corporates Amid Economic Turbulence
27
Joint Default Analysis (“JDA”) – Example CEZ
Likelihood of Support from State:
Medium (31-70%)
Local Currency Rating
BCA(*)
of CEZ:
7 (i.e. A3)
Rating of CEZ:
of Czech Republic:
A2 stable
A1
Default Dependence between CEZ and Government:
Medium (31-70%)
(*)Baseline Credit Assessment
CEE Corporates Amid Economic Turbulence
28
Positioning of CEE Corporates
CEE Corporates Amid Economic Turbulence
29
Distribution of CEE Corporate Ratings
CEE Corporate Rating Distribution
The proportion of issuers in the investment
Dec-08
8
7
6
5
4
3
2
1
0
Jan-10
grade (IG) range (Aaa-Baa) decreased from 54%
down to 45% as the economic recession
impacted also more stable utility industries
Aaa
Aa
A
Baa
Ba
B
Caa-C
Most of CEE IG companies are state owned –
government ratings add rating volatility
CEE versus EMEA Corporate Ratings
Distribution
40%
CEE
EMEA
High proportion of Caa-C ratings compared to
EMEA rating distribution suggests larger
30%
20%
proportion of potential defaulters in CEE rated
10%
universe
0%
Aaa
Aa
A
Baa
Ba
B
Caa-C
Investment Grade – delayed impact of adverse economic development
Speculative Grade – stabilised but still vulnerable due to high proportion of Caa-C ratings
CEE Corporates Amid Economic Turbulence
30
Government Related Issuers (GRIs)
Important Part of CEE Corporate Ratings
In many CEE markets, ratings and capital market
GRIs versus Private Companies - Rating Distribution
(as of January 2010)
issuance driven by state sector in search of capital
(energy, railways, oil & gas...) – CEZ (CR), Eesti
non GRI
7
GRI
6
Energia (EST)
5
4
3
High share of GRIs show importance of state and
2
1
limited preparedness of other players in tapping
0
Aaa
capital markets
Regulatory environment and state support plays a
For 40% of CEE government-related issuers, a
A
Baa
Ba
B
Caa-C
GRIs in CEE Rating Universe
(as of January 2010)
significant role in influencing financial profile of IG
issuers
Aa
5
GRI
non GRI
4
3
2
downgrade of the government rating would result in
1
GRI downgrade
0
GRIs represent 54% of overall CEE corporate rating
universe and over 90% of investment-grade issuers
CEE Corporates Amid Economic Turbulence
31
Downward pressure on corporate ratings
is gradually easing
75
CFG EMEA Quarterly Upgrades and Downgrades
50
EMEA
» Downgrades for Western European
issuers outpaced upgrades since Q1
2008
25
» Sharp increase in downgrades from end
2008/beginning 2009 decelerated over
H2 2009 and 2010
0
Upgrades
Downgrades
CEE Corporates: Up/Downgrades
25
UPGRADE
DOWNGRADE
CEE
20
» 3 downgrades in CEE over 1998-2007
» 28 downgrades since Jan 2008
» 1 default (Kremikovtzi) and 1 filing for
protection (Belvedere)
15
10
5
0
2004
2005
2006
2007
2008
2009
9M 2010
CEE Corporates Amid Economic Turbulence
32
Negative Outlooks Decreased but Positive News
still to Come
CFG CEE Outlooks, January 2010
» The proportion of CEE ratings with
negative outlook decreased from 46% to
32% over 2010 reflecting stabilisation
and easing of pressure on credit quality
0%
20%
40%
Stable
Negative
60%
RUR D
80%
100%
Positive
CFG CEE Outlooks, October 2010
0%
20%
40%
Stable
Negative
60%
RUR D
80%
» …while positive pressure remains
uncertain as only 1 of CEE ratings is
expected to face upward pressure
(positive outlook)
100%
Positive
CEE Corporates Amid Economic Turbulence
33
Major Drivers Influencing CEE Corporates
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
 Significant FX risk exposure due to high proportion of export
 Large foreign currency denominated debts creating significant FX exposure
Impact of Sovereign Ratings Development
 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
Regulation and Government
 Financial position dependent on high proportion of regulated income
 Governments as owners influence strategic decisions
CEE Corporates Amid Economic Turbulence
34
Q&A
CEE Corporates Amid Economic Turbulence
35
© 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
[email protected]
Central + (420) 224 222 929
Direct + (420) 221 666 312