iciec credit...financial institutions credit opinion 31 july 2017 update ratings iciec domicile...

FINANCIAL INSTITUTIONS

CREDIT OPINION31 July 2017

Update

RATINGS

ICIECDomicile Saudi Arabia

Long Term Rating Aa3

Type Insurance FinancialStrength - Fgn Curr

Outlook Stable

Please see the ratings section at the end of this reportfor more information. The ratings and outlook shownreflect information as of the publication date.

Contacts

Mohammed AliLonde

971-4-237-9503

[email protected]

HarshaniKotuwegedara

971-4-237-9567

Associate [email protected]

Helena Kingsley-Tomkins

44-20-7772-1397

Assistant [email protected]

Antonello Aquino 44-20-7772-1582Associate [email protected]

ICIECHeightened claims experience weakened bottom-line profits

Summary rating rationaleThe Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) is ratedAa3 stable for insurance financial strength. ICIEC was established in 1994 in Jeddah, SaudiArabia. ICIEC provides export credit insurance and reinsurance for exports from its membercountries to anywhere in the world to cover the non-payment of export receivables resultingfrom commercial or non-commercial risks. The company also provides investment insurancefor foreign investment flows into its member countries, irrespective of their country of origin,against country risks, mainly the risks of exchange-transfer restrictions, expropriation, warand civil disturbance, and breach of contract by the host government. ICIEC is a member ofthe Islamic Development Bank (IDB, Aaa stable), which holds 52.1% of ICIEC's issued sharesthrough its Waqf fund as of 2nd Rabi Al-Akhir 1438H corresponding to 31 December 2016),a special fund established by IDB. ICIEC's other shareholders/members include the sovereignmembers of the IDB, including Saudi Arabia (A1 stable) and other sovereign members of theOrganisation of the Islamic Conference.

ICIEC's rating reflects the strong ability and potentially high willingness of ICIEC's mainshareholders, in particular IDB and Saudi Arabia, to support the company in times offinancial distress. As a member of the IDB Group, ICIEC benefits from various managerialsynergies and support from its parent. On a standalone basis, the rating reflects ICIEC's legalstructure and business nature as the only multilateral export credit and investment insurancecorporation in the world that provides Shariah-compatible insurance and reinsuranceproducts, as well as its enhanced regional knowledge based on its experience of operating inthe region.

ICIEC changed its fiscal year-end from the Lunar Hijri calendar with year-end 30th DhulHijjah (for example, previous year-end of 30th Dhul Hijjah pertained to 13 October 2015,that is, fiscal 2015) to the Solar Hijri calendar with year-end 31 December (2nd Rabi Al-Akhir 1438H, fiscal 2016). This change resulted in the financial results for fiscal 2016 (31December 2016) representing 15 months. In fiscal 2016, ICIEC reported gross writtenpremiums of ID27.7 million for 15 months compared with ID16.6 million for fiscal 2015 (12months). The company's underwriting results weakened in fiscal 2016 due to some largeclaims resulting in a loss ratio of 108% (fiscal 2015: 43%) and a combined ratio of 200.0%(fiscal 2015: 141.5%). High claims losses resulted in a net loss of ID7.4 million for fiscal 2016(fiscal 2015: loss of ID0.6 million). ICIEC's good asset quality continued with high-risk assets(HRA) to shareholders' equity of 16.8% as of fiscal 2016 versus 14.6% as of fiscal 2015. Asthe company's insurance exposure almost doubled as of fiscal 2016, the net underwritingleverage and net total exposure as a percentage of shareholders' equity both increased to0.2x and 7.8x, respectively (fiscal 2015: 0.1x and 5.1x).

https://www.surveygizmo.com/s3/1133212/Rate-this-research?pubid=PBC_1083505

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Exhibit 1

ICIEC's combined ratio development

108%

43%19% 23% 12%

92%

98%129%

99% 120%

0%

50%

100%

150%

200%

2016 2015 2014 2013 2012

Loss Ratio (1yr.) Expense Ratio (1yr.) Combined Ratio (1 yr.)

2016 reflects 15 monthsSource: Company annual reports, Moody's workings

Credit strengths

» Capital support from IDB and other member countries, including Gulf Cooperation Council (GCC) countries (particularly SaudiArabia)

» Advantageous position as the only insurer providing Shariah-compatible export credit and investment

» Regional knowledge gained while operating in the region

» Various managerial synergies and support benefits as a member of the IDB Group

» Strong international network

Credit challenges

» Further improvement in and management of standalone capitalisation levels in the context of growth opportunities and the levelof geopolitical risk in some of its markets

» Enhancement of business coverage and reduction in risk and business/client concentrations

» Optimisation of and improvement in the level of efficiency of the organisation and the underwriting process

» Optimisation of the production of distribution networks

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 31 July 2017 ICIEC: Heightened claims experience weakened bottom-line profits


Rating outlookThe outlook is stable.

What to watch for:

» Any significant dilution of shareholding from IDB Group or reduction in operational support

» Geopolitical instability within certain member countries to which ICIEC is exposed

» The impact of low oil prices and weakening of credit quality of its member countries

» Potential for meaningful top-line growth following the capital injections

» Increasing focus on medium-term business

Factors that could lead to an upgrade

» A multi-notch upgrade of the long-term ratings of ICIEC's main shareholders/member countries

» Significant strengthening in ICIEC's ownership structure or level of support from members and in particular from IDB through itsWaqf fund

Factors that could lead to a downgrade

» A downgrade of some of ICIEC's main shareholders/member countries, in particular IDB, as well as Saudi Arabia's rating movingbelow A1

» Significant reduction in ownership or level of support from IDB

» Material increase in ICIEC's risk profile due to significant deterioration in current capitalisation or a material increase in thecompany's asset risk and insurance risk profile



Key indicators

Exhibit 2

ICIEC[1][2][3][4][5] 2016 2015 2014 2013 2012

As Reported (Islamic Dinar (ID) Millions)

Gross Premiums Written 27.7 16.6 10.8 8.9 8.7

Net Premiums Written 14.5 8.6 7.6 5.7 5.5

Net income (loss) attributable to common shareholders' (7.4) (0.6) (3.0) 0.3 (0.4)

Total Shareholders' Equity 152.5 152.8 150.5 137.1 129.3

Moody's Adjusted Rat ios

High Risk Assets % Shareholders' Equity 16.8% 14.6% 13.8% 15.7% 11.2%

Reinsurance Recoverable % Shareholders' Equity 24.6% 8.5% 0.2% 1.1% 1.4%

Goodwill & Intangibles % Shareholders' Equity 0.0% 0.0% 0.0% 0.0% 0.0%

Net Total Exposure % Shareholders' Equity 7.8x 5.1x 5.6x 4.1x 4.1x

Net Underwriting Leverage (Credit Insurers) 0.2x 0.1x 0.1x 0.1x 0.1x

Combined Ratio, gross (1 yr.) 94.2% 64.0% 92.3% 72.3% 82.3%

Combined Ratio (1 yr.) 200.0% 141.5% 147.8% 122.7% 132.5%

Sharpe Ratio of ROC (5 yr. avg) NM NM NM NA NA

Financial Leverage 4.6% 1.2% 0.8% 0.1% 3.8%

Total Leverage 4.6% 1.2% 0.8% 0.1% 3.8%

Earnings Coverage (1 yr.) NM NM NM NM NM

[1] Information based on IFRS financial statements as of Fiscal YE December 31 FYE 2016 being the 2016 Solar Hijri year end; 02 Rabi Al-Akhir 1438H corresponds to 31 December FYE2016. Prior years are as of Lunar Hijri year ends of 30 Dhul-Hijjah being the fiscal year end and for 2015 corresponding to 13 October 2015 [2] Certain items may have been relabeled and/or reclassified for global consistency [3] 1 ID= US$1.34433 as at 31 December 2016 [4] Includes shareholders' and policyholders' fund [5] YE 2016 represent 15 monthsSource: Company annual reports, Moody's workings

Notching considerationsWe rate ICIEC Aa3 for insurance financial strength (stable outlook), which is several notches higher than the adjusted rating indicatedby the Moody's insurance financial strength rating Scorecard. The rating differential reflects the company's key role as the facilitatorof trade among Islamic countries and the consequent support that the rating incorporates from a variety of highly rated sovereigns inaddition to its main owner IDB, as described under “Other credit considerations”.

Detailed rating considerationsMarket position, brand and distribution: Baa - Strong position in core markets, but poor presence globallyAlthough ICIEC has a relatively small scale on a global basis, it maintains a strong market position in its core market of providing exportcredit insurance and reinsurance to its member countries. With total gross premiums written (GPW) of ID27.7 million in fiscal 2016 anda large proportion of its premiums in relation to contracts written in markets such as Saudi Arabia, GCC countries and other nations,ICIEC is seen as one of the leaders in its market segment. Given the relatively low penetration of credit insurance in the region andamong member countries, we expect stable premium volume of ICIEC to continue. Notwithstanding this, ICIEC has experienced overthe last few years a considerable degree of competition from international players, especially in its short-term insurance portfolio,which represented 80% of ICIEC's business insured as of fiscal 2016; however in terms of business insured the short term portfolio grewby 51% in fiscal 2016 (15-month period). The company's strategy is to focus on increasing the proportion of medium-term insuranceand foreign investment insurance. Furthermore, ICIEC has approved plans to commence providing an insurance wrapper to SovereignSukuk issuances, a product that could potentially expose ICIEC to additional risks and will be closely monitored by us.

ICIEC's diversification by insurance purchaser is relatively low, with a current focus on several large exporting names. Nevertheless, thismight potentially improve as ICIEC expands its operations across its member countries. The company's business insured increased by49% to $8.0 billion in fiscal 2016 (fiscal 2015: $5.4 billion), reflecting the strong demand for credit insurance and political risk amongICIEC member countries.



Product focus and diversification: Ba - Limited diversification as the company is a pure export credit insurerAs a pure export credit insurer, ICIEC's business diversification is inherently limited. ICIEC's risk exposure predominantly relates toinsurance of exports from various member countries to countries globally and in particular to the default of commercial counterpartsin those territories. In addition to commercial credit exposure, certain ICIEC policies also cover, albeit to a more limited degree, politicalrisk, which in many countries can be relatively high. Nevertheless, the stable demand for political risk policies in ICIEC's membercountries led to continued stable new commitments in fiscal 2016. ICIEC has also won some major new clients in fiscal 2016 incountries like Germany, Kenya, Saudi Arabia, Jordan, Denmark, Japan and Singapore. However, ICIEC maintains good access to a widevariety of sovereign markets through its member sovereign countries, ensuring good information and access in the event of politicaltrade interventions.

The material proportion and focus on multiyear policies limit ICIEC's flexibility to change policies at renewal, if necessary, potentiallyaffecting the overall company's risk portfolio. Furthermore, the company's exposure by buyer is relatively concentrated by country andby sector, but overall reflecting ICIEC's strategic goal to facilitate the trade of its member countries.

Asset quality: A - Good investment strategy with the majority of investments held in MurabahaICIEC's invested assets predominantly consist of Shariah-compliant Murabaha (similar to money market instruments) and Sukukinvestments. The portfolio is liquid, and the majority is rated within the investment grade category. We therefore regard asset qualityas strong, although the company's Shariah compliance does impose some restrictions in terms of asset choice leading to a relativelyhigh concentration risk. The investments in shares (fiscal 2016: 7.2% — primarily in Takaful Re and ICD — an affiliate of IDB) carryadditional risk, but the risk is in proportion to the capital adequacy of ICIEC, with HRA (in ICIEC's case includes equity and non-investment grade debt) as a percentage of consolidated equity (shareholders' and policyholders') was low at 16.8% as of fiscal 2016(fiscal 2015: 14.6%).

Reinsurance recoverable as a percentage of shareholders' equity was 24.6% as of fiscal 2016 (fiscal 2015: 8.5%). In the past, reinsurancerecoverables figure actually related to other debtors rather than specific reinsurance counterparts.

Capital adequacy: Baa - Adequate capitalisation with considerable free assets backing high-risk policiesWe view ICIEC's capital levels as adequate. Despite the increase in net total exposure as a proportion of consolidated equity to 7.8x(fiscal 2015: 5.1x) and net underwriting leverage of 0.2x as of fiscal 2016, ICIEC remained strongly capitalised. However, this measureis not risk adjusted and does not reflect the higher probability of default on political risk versus credit risk, and the concentrationexposures on both the liability and asset side of the balance sheet. Nevertheless, ICIEC maintains a strong level of potential shareholderresources, in particular both the Waqf fund and the individual sovereign members of ICIEC maintain considerable levels of free assetsthat could be provided to support ICIEC's growth. In March 2011, the board of directors of ICIEC approved a proposal to more thandouble ICIEC's capital resources to ID400 million ($613 million) from ID150 million ($230 million). As of year-end 2016, ID288 million($406.5 million) was subscribed, of which ID140.3 million ($198.1 million) was paid up. Furthermore, the support is illustrated by thefact that IDB's Waqf fund has participated in the capital increase in 2015 with IDB's Waqf fund owning 52.1% of ICEC as of fiscal 2016.

Exhibit 3

Capitalisation indicators for ICIEC

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

0

200

400

600

800

1,000

1,200

1,400

2016 2015 2014 2013 2012

ID m

n

Net Total Exposure Net Total Exposure % Shareholder's Equity

Sources: Company annual reports, Moody's workings



Profitability: Ba - Weak underwriting profitability affected the bottom-lineICIEC's underwriting performance weakened in fiscal 2016 as illustrated by the high loss ratio of 108% (fiscal 2015: 43%). The increasedloss ratios pertain to certain large losses incurred during the year. Furthermore, ICIEC strengthened its reserves in fiscal 2016. With this,ICIEC's combined ratio shot up to 200% from 142% in the previous year, resulting in the company's net income weakening to a loss ofID7.4 million compared with a loss of ID0.6 million in fiscal 2015.

However we note that as part of the IDB Group and reflecting its pseudo-state/social role, ICIEC is unlikely to aim to consistentlyproduce strong levels of profitability, and the volatility of results is also likely to be a feature. However, we regard a consistent andmodest level of profitability, principally through controlled underwriting and pricing but also through good levels of expense control, asbeing a key credit goal for ICIEC.

Reserve adequacy: Baa - Adequate reserves, despite exposure to medium-term and investment policiesReserves are regarded as adequate, reflecting the short-tail nature of the risks that ICIEC takes compared with Middle Eastern propertyand casualty insurers; however, it underwrites more medium-term and investment multiyear policies than other credit insurers that werate. ICIEC strengthened its reserves in fiscal 2015 and fiscal 2016 due to some large losses pertaining to a single client.

Financial flexibility: Ba - Unlevered and with modest standalone financial flexibility, but benefits from IDB ownershipAs a Shariah-compliant institution, ICIEC does not fund itself through borrowings. In addition, ICIEC's dividend policy remains restricted(dividends are not payable until substantial reserves have accrued). Consequently, ICIEC's ability to fund its required regular cash-financing needs is strong. However, on a standalone basis, we regard ICIEC's ability to source additional external capital as modest.More positively, the company's position within the IDB Group and its supportive sovereign member countries indicates that its overallfinancial flexibility is at higher levels.

Operating environment: Baa - Adequate economic environments offset by underdeveloped insurance marketsICIEC is headquartered in Saudi Arabia and operates in various countries that are sovereign members of its major shareholderIDB, as well as other sovereign members of the Organisation of the Islamic Conference. ICIEC benefits from the strong economicstability of those of its members from the GCC. However, a majority of the insurance markets of the member sovereigns are still in adevelopmental stage, with potentially volatile growth and with some large risk concentrations. As an established credit insurer withsovereign ties, access to business is likely to continue to flow into ICIEC.

Other credit considerationsIn addition to these standalone qualities, ICIEC's rating also factors in the considerable benefits in the context of its key role as thefacilitator of trade among Islamic countries. In particular, ICIEC's rating reflects the strong ability and potentially high willingness ofICIEC's main ultimate shareholders, and in particular the IDB and Saudi Arabia, to support the company in times of financial distress.Recently, the capital resources of ICIEC were subscribed capital doubled to ID288 million as of fiscal 2015 from ID149 million as of1432H, while called capital has increased to ID144 million from ID74.5 million in the same period, as evidence of further capital supportfrom ICIEC's owners, including the IDB through its Waqf fund.



Rating methodology and Scorecard factors

Exhibit 4Financial Strength Rating Scorecard Aaa Aa A Baa Ba B Caa Score Adjusted Score

Ba Ba

Market Posit ion and Brand (8%) Ba Baa

- Relative Market Share Ratio

- Distribution and Access to New Markets X

Product Focus and Diversificat ion (16%) Baa Ba

- Business Diversification X

- Flexibility of Underwriting X

- Risk Diversification X

Financial Profile Aa Baa

Asset Quality (12%) Aaa A

- High Risk Assets % Shareholders' Equity 16.8%

- Reinsurance Recoverable % Shareholders' Equity 24.6%

- Goodwill & Intangibles % Shareholders' Equity 0.0%

Capital Adequacy (16%) Aaa Baa

- Net Total Exposure % Shareholders' Equity 7.8x

- Net Underwriting Leverage (Credit Insurers) 0.2x

Profitability (16%) A Ba

- Combined Ratio (5 yr. avg) 81.0%

- Sharpe Ratio of ROC (5 yr. avg) NM

Reserve Adequacy (4%) Baa

- Worst Reserve Development for the Last 10 Years % Beg. Reserves

Financial Flexibility (8%) A Ba

- Financial Leverage 4.6%

- Earnings Coverage (5 yr. avg)

Operat ing Environment Baa Baa

Aggregate Profile A1 Baa3

[1] Information based on IFRS financial statements as of Fiscal YE December 31 FYE 2016 being the 2016 Solar Hijri year end; 02 Rabi Al-Akhir 1438H corresponds to 31 December FYE2016. Prior years are as of Lunar Hijri year ends of 30 Dhul-Hijjah being the fiscal year end and for 2015 corresponding to 13 October 2015 [2] Certain items may have been relabeled and/or reclassified for global consistency [3] FYE 2016 represent 15 monthsSources: Company annual reports, Moody's workings

Ratings

Exhibit 5Category Moody's RatingICIEC

Rating Outlook STAInsurance Financial Strength Aa3

Source: Moody's Investors Service



© 2017 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 INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDITRISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THERELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITYMAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGSDO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’SOPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVEMODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’SPUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOTPROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THESUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATIONAND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FORPURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FORRETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACTYOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW,AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTEDOR 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 ANYPERSON 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 wellas 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 ituses 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 the Moody’s 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 anyindirect, 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 anysuch information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses ordamages, 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 aparticular 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 compensatorylosses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for theavoidance 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 ANY PARTICULAR PURPOSE OF ANY SUCHRATING OR 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 (includingcorporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating,agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintainpolicies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO andrated 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 atwww.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 InvestorsService 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 intendedto be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, yourepresent 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 will directly orindirectly 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 asto the 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. It would be recklessand inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or otherprofessional adviser.

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’sOverseas 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 NationallyRecognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by anentity 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 registeredwith 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, debentures, notes and commercial paper) and preferredstock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it feesranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

REPORT NUMBER 1083505


http://www.moodys.com

iciec credit...financial institutions credit opinion 31 july 2017 update ratings iciec domicile...

Documents