61
)LWFK 5DWLQJV ± 'HILQLWLRQV RI 5DWLQJV DQG 2WKHU )RUPV RI 2SLQLRQ ± -XO\ Definitions of Ratings and Other Forms of Opinion

Fitch Ratings: Definitions of Ratings

Embed Size (px)

DESCRIPTION

Fitch is one of the top credit rating agencies in the US. This PDF explains how they conduct their ratings.

Citation preview

Page 1: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�������

Definitions of Ratings and Other

Forms of Opinion

Page 2: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\����������

UNDERSTANDING CREDIT RATINGS – LIMITATIONS AND USAGE .............................................................................................. 4 A. CREDIT RATING SCALES ............................................................................................................................................... 6

SUMMARY OF PRIMARY SCALES ........................................................................................................................................ 7 A.1 INTERNATIONAL ISSUER AND CREDIT RATING SCALES ............................................................................................... 9

$���� /RQJ�7HUP�5DWLQJ�6FDOHV�������������������������������������������������������������������������������������������������������������������������������� $������ ,VVXHU�&UHGLW�5DWLQJ�6FDOHV��������������������������������������������������������������������������������������������������������������������� $������ &RUSRUDWH�)LQDQFH�2EOLJDWLRQV�±�/RQJ�7HUP�5DWLQJ�6FDOHV����������������������������������������������������������������� $������ 6WUXFWXUHG��3URMHFW��3XEOLF�)LQDQFH�2EOLJDWLRQV�±�/RQJ�7HUP�5DWLQJ�6FDOHV�������������������������������������

$���� 6KRUW�7HUP�5DWLQJV����������������������������������������������������������������������������������������������������������������������������������������� $������ 6KRUW�7HUP�5DWLQJV�$VVLJQHG�WR�2EOLJDWLRQV�LQ�&RUSRUDWH��3XEOLF�DQG�6WUXFWXUHG�)LQDQFH������������������ $������� 5HODWLRQVKLS�EHWZHHQ�6KRUW�7HUP�DQG�/RQJ�7HUP�5DWLQJV�LQ�&RUSRUDWH�DQG�3XEOLF�)LQDQFH��������������

A.2 RECOVERY RATINGS .............................................................................................................................................. 21 A.3. OTHER INTERNATIONAL CREDIT RATINGS ............................................................................................................... 23

$���� %DQN�,QGLYLGXDO��9LDELOLW\�DQG�6XSSRUW�5DWLQJV����������������������������������������������������������������������������������������������� $������ 6XSSRUW�5DWLQJV�������������������������������������������������������������������������������������������������������������������������������������� $�����$ %DQN�9LDELOLW\�5DWLQJV�����������������������������������������������������������������������������������������������������������������������������

$���� ,QVXUHU�)LQDQFLDO�6WUHQJWK�5DWLQJ�'HILQLWLRQV������������������������������������������������������������������������������������������������� $������ /RQJ�7HUP�,QWHUQDWLRQDO�,)6�5DWLQJV����������������������������������������������������������������������������������������������������� $������ 6KRUW�7HUP�,)6�5DWLQJV�������������������������������������������������������������������������������������������������������������������������

A.4 NATIONAL RATINGS ............................................................................................................................................... 32 $���� 1DWLRQDO�&UHGLW�5DWLQJV����������������������������������������������������������������������������������������������������������������������������������� $���� 1DWLRQDO�/RQJ�7HUP�&UHGLW�5DWLQJV���������������������������������������������������������������������������������������������������������������� $���� 1DWLRQDO�6KRUW�7HUP�&UHGLW�5DWLQJV���������������������������������������������������������������������������������������������������������������� $���� 1DWLRQDO�,QVXUHU�)LQDQFLDO�6WUHQJWK�5DWLQJV���������������������������������������������������������������������������������������������������

A.5 COUNTRY CEILINGS ............................................................................................................................................... 38 A.6 ADDITIONAL USAGE OF PRIMARY CREDIT RATING SCALES ...................................................................................... 39

$���� ([SHFWHG�5DWLQJV�������������������������������������������������������������������������������������������������������������������������������������������� $���� 3ULYDWH�5DWLQJV������������������������������������������������������������������������������������������������������������������������������������������������ $���� 3URJUDP�5DWLQJV��������������������������������������������������������������������������������������������������������������������������������������������� $���� ³,QWHUHVW�2QO\´�5DWLQJV������������������������������������������������������������������������������������������������������������������������������������ $���� ³3ULQFLSDO�2QO\´�5DWLQJV���������������������������������������������������������������������������������������������������������������������������������� $���� ³5DWH�RI�5HWXUQ´�5DWLQJV��������������������������������������������������������������������������������������������������������������������������������� $���� ³8QHQKDQFHG´�5DWLQJV������������������������������������������������������������������������������������������������������������������������������������

B. OTHER SPECIALIST RATING SCALES .......................................................................................................................... 41 B.1 SERVICER RATINGS ............................................................................................................................................... 41

%���� *HQHUDO�6HUYLFHU�5DWLQJV�������������������������������������������������������������������������������������������������������������������������������� B.2 FUND RATINGS ...................................................................................................................................................... 44

%���� ,QWHUQDWLRQDO�)XQG�&UHGLW�5DWLQJV������������������������������������������������������������������������������������������������������������������� %���� ,QWHUQDWLRQDO�)XQG�9RODWLOLW\�5DWLQJV��������������������������������������������������������������������������������������������������������������� %���� ,QWHUQDWLRQDO�0RQH\�0DUNHW�)XQG�5DWLQJV������������������������������������������������������������������������������������������������������ %���� �)XQG�4XDOLW\�5DWLQJV�������������������������������������������������������������������������������������������������������������������������������������� %���� 1DWLRQDO�)XQG�&UHGLW��)XQG�9RODWLOLW\��DQG�0RQH\�0DUNHW�)XQG�5DWLQJV��������������������������������������������������������

%������ 1DWLRQDO�)XQG�&UHGLW�5DWLQJV����������������������������������������������������������������������������������������������������������������� %������ 1DWLRQDO�)XQG�9RODWLOLW\�5DWLQJV������������������������������������������������������������������������������������������������������������� %������ 1DWLRQDO�0RQH\�0DUNHW�)XQG�5DWLQJV����������������������������������������������������������������������������������������������������

B.3 ASSET MANAGEMENT RATINGS .............................................................................................................................. 53 %���� $VVHW�0DQDJHU�5DWLQJ�'HILQLWLRQV������������������������������������������������������������������������������������������������������������������� %���� 1DWLRQDO�$VVHW�0DQDJHU�5DWLQJ�'HILQLWLRQV����������������������������������������������������������������������������������������������������

C. OTHER FORMS OF OPINION ......................................................................................................................................... 55

&���� &UHGLW�$VVHVVPHQW������������������������������������������������������������������������������������������������������������������������������������������ &���� 5DWLQJ�$VVHVVPHQW�6HUYLFH���������������������������������������������������������������������������������������������������������������������������� &���� 6KDGRZ�5DWLQJV��µ ¶����������������������������������������������������������������������������������������������������������������������������������������� &���� 2SLQLRQV�3URYLGHG�E\�)LWFK�1RQ�5DWLQJ�$IILOLDWHV�������������������������������������������������������������������������������������������

Page 3: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\����������

D. RATING WATCHES AND RATING OUTLOOKS ................................................................................................................ 56

'���� 5DWLQJ�:DWFK��������������������������������������������������������������������������������������������������������������������������������������������������� '���� 5DWLQJ�2XWORRN������������������������������������������������������������������������������������������������������������������������������������������������ '���� 'HFLGLQJ�:KHQ�WR�$VVLJQ�5DWLQJ�:DWFK�RU�2XWORRN���������������������������������������������������������������������������������������

E. RATING ACTIONS ....................................................................................................................................................... 58 (���� 6WDQGDUG�5DWLQJ�$FWLRQV��������������������������������������������������������������������������������������������������������������������������������� (���� 'DWD�$FWLRQV���������������������������������������������������������������������������������������������������������������������������������������������������� (���� +LVWRULFDO�$FWLRQV��������������������������������������������������������������������������������������������������������������������������������������������� (���� :LWKGUDZDOV�����������������������������������������������������������������������������������������������������������������������������������������������������

Page 4: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\����������

8QGHUVWDQGLQJ�&UHGLW�5DWLQJV�±�/LPLWDWLRQV�DQG�8VDJH��

5DWLQJV��LQFOXGLQJ�5DWLQJ�:DWFKHV�DQG�2XWORRNV��DVVLJQHG�E\�)LWFK�DUH�RSLQLRQV�EDVHG�RQ�HVWDEOLVKHG�FULWHULD�DQG�PHWKRGRORJLHV�WKDW�)LWFK�LV�FRQWLQXRXVO\�HYDOXDWLQJ�DQG�XSGDWLQJ���7KHUHIRUH��UDWLQJV�DUH�WKH�FROOHFWLYH�ZRUN�SURGXFW�RI�)LWFK�DQG�QR�LQGLYLGXDO��RU�JURXS�RI�LQGLYLGXDOV��LV�VROHO\�UHVSRQVLEOH�IRU�D�UDWLQJ��5DWLQJV�DUH�QRW�IDFWV��DQG�WKHUHIRUH�FDQQRW�EH�GHVFULEHG�DV�EHLQJ��DFFXUDWH��RU��LQDFFXUDWH���8VHUV�VKRXOG�UHIHU�WR�WKH�GHILQLWLRQ�RI�HDFK�LQGLYLGXDO�UDWLQJ�IRU�JXLGDQFH�RQ�WKH�GLPHQVLRQV�RI�ULVN�FRYHUHG�E\�VXFK�UDWLQJ���

)LWFKV� RSLQLRQV� DUH� IRUZDUG� ORRNLQJ� DQG�L QFOXGH� DQDO\VWV� YLHZV� RI� IXWXUH� SHUIRUPDQFH�� ,Q� PDQ\� FDVHV�� WKHVH� YLHZV� RQ�I XWXUH�SHUIRUPDQFH�PD\�LQFOXGH�IRUHFDVWV��ZKLFK�PD\�LQ�WXUQ��L��EH�LQIRUPHG�E\�QRQ�GLVFORVDEOH�PDQDJHPHQW�SURMHFWLRQV���LL��EH�EDVHG�RQ�D�WUHQG��VHFWRU�RU�ZLGHU�HFRQRPLF�F\FOH��DW�D�FHUWDLQ�VWDJH�LQ�WKH�F\FOH��RU��LLL��EH�EDVHG�RQ�KLVWRULFDO�SHUIRUPDQFH��$V�D�UHVXOW��ZKLOH�UDWLQJV�PD\� LQFOXGH�F\FOLFDO�FRQVLGHUDWLRQV�DQG� W\SLFDOO\�DWWHPSW� WR�DVVHVV� WKH� OLNHOLKRRG�RI� UHSD\PHQW�DW� �XOWLPDWH�ILQDO�PDWXULW\���PDWHULDO�FKDQJHV�LQ�HFRQRPLF�FRQGLWLRQV�DQG�H[SHFWDWLRQV��IRU�D�SDUWLFXODU�LVVXHU��PD\�UHVXOW�LQ�D�UDWLQJ�FKDQJH���

&UHGLW�UDWLQJV�GR�QRW�GLUHFWO\�DGGUHVV�DQ\�ULVN�RWKHU�WKDQ�FUHGLW�ULVN��&UHGLW�UDWLQJV�GR�QRW�FRPPHQW�RQ�WKH�DGHTXDF\�RI�PDUNHW�SULFH�RU�PDUNHW� OLTXLGLW\� IRU� UDWHG� LQVWUXPHQWV�� DOWKRXJK� VXFK� FRQVLGHUDWLRQV�PD\� DIIHFW� )LWFKV� YLHZ� RQ�F UHGLW� ULVN�� VXFK� DV� DFFHVV� WR�FDSLWDO�RU�OLNHOLKRRG�RI�UHILQDQFLQJ���

5DWLQJV�DUH�UHODWLYH�PHDVXUHV�RI�ULVN��DV�D�UHVXOW��WKH�DVVLJQPHQW�RI�UDWLQJV�LQ�WKH�VDPH�FDWHJRU\�WR�HQWLWLHV�DQG�REOLJDWLRQV�PD\�QRW�IXOO\�UHIOHFW�VPDOO�GLIIHUHQFHV�LQ�WKH�GHJUHHV�RI�ULVN��&UHGLW�UDWLQJV��DV�RSLQLRQV�RQ�UHODWLYH�UDQNLQJ�RI�YXOQHUDELOLW\�WR�GHIDXOW��GR�QRW�LPSO\� RU� FRQYH\� D�V SHFLILF� VWDWLVWLFDO� SUREDELOLW\� RI� GHIDXOW�� QRWZLWKVWDQGLQJ� WKH� DJHQF\V� SXEOLVKHG� GHIDXOW� KLVWRULHV� WKDW�PD\� EH�PHDVXUHG�DJDLQVW�UDWLQJV�DW�WKH�WLPH�RI�GHIDXOW��&UHGLW�UDWLQJV�DUH�RSLQLRQV�RQ�UHODWLYH�FUHGLW�TXDOLW\�DQG�QRW�D�SUHGLFWLYH�PHDVXUH�RI�VSHFLILF�GHIDXOW�SUREDELOLW\���

5DWLQJV�DUH�RSLQLRQV�EDVHG�RQ�DOO�LQIRUPDWLRQ�NQRZQ�WR�)LWFK��LQFOXGLQJ�SXEOLFO\�DYDLODEOH�LQIRUPDWLRQ�DQG�RU�QRQ�SXEOLF�GRFXPHQWV�DQG� LQIRUPDWLRQ�SURYLGHG� WR� WKH�DJHQF\�E\�DQ�LVVXHU�DQG�RWKHU�SDUWLHV��3XEOLFDWLRQ�DQG�PDLQWHQDQFH�RI�DOO� UDWLQJV�DUH�VXEMHFW� WR�WKHUH�EHLQJ�VXIILFLHQW�LQIRUPDWLRQ��FRQVLVWHQW�ZLWK�WKH�UHOHYDQW�FULWHULD�DQG�PHWKRGRORJ\��WR�IRUP�D�UDWLQJ�RSLQLRQ���

,Q� LVVXLQJ�DQG�PDLQWDLQLQJ� LWV� UDWLQJV��)LWFK� UHOLHV�RQ� IDFWXDO� LQIRUPDWLRQ� LW� UHFHLYHV� IURP� LVVXHUV�DQG�XQGHUZULWHUV�DQG� IURP�RWKHU�VRXUFHV� )LWFK� EHOLHYHV� WR� EH� FUHGLEOH�� )LWFK� FRQGXFWV� D�U HDVRQDEOH� LQYHVWLJDWLRQ� RI� WKH� IDFWXDO� LQIRUPDWLRQ� UHOLHG� XSRQ� E\� LW� LQ�DFFRUGDQFH�ZLWK� LWV� UDWLQJ�PHWKRGRORJ\��DQG�REWDLQV� UHDVRQDEOH� YHULILFDWLRQ�RI� WKDW� LQIRUPDWLRQ� IURP� LQGHSHQGHQW�VRXUFHV�� WR� WKH�H[WHQW�VXFK�VRXUFHV�DUH�DYDLODEOH�IRU�D�JLYHQ�VHFXULW\�RU�LQ�D�JLYHQ�MXULVGLFWLRQ���

7KH�PDQQHU�RI�)LWFK¶V�IDFWXDO�LQYHVWLJDWLRQ�DQG�WKH�VFRSH�RI�WKH�WKLUG�SDUW\�YHULILFDWLRQ�LW�REWDLQV�ZLOO�YDU\�GHSHQGLQJ�RQ�WKH�QDWXUH�RI�WKH� UDWHG�VHFXULW\�DQG� LWV� LVVXHU�� WKH� UHTXLUHPHQWV�DQG�SUDFWLFHV� LQ� WKH� MXULVGLFWLRQ� LQ�ZKLFK� WKH� UDWHG�VHFXULW\� LV�RIIHUHG�DQG�VROG�DQG�RU�WKH�LVVXHU�LV�ORFDWHG��WKH�DYDLODELOLW\�DQG�QDWXUH�RI�UHOHYDQW�SXEOLF�LQIRUPDWLRQ��DFFHVV�WR�WKH�PDQDJHPHQW�RI�WKH�LVVXHU�DQG�LWV�DGYLVHUV�� WKH�DYDLODELOLW\�RI�SUH�H[LVWLQJ� WKLUG�SDUW\�YHULILFDWLRQV�VXFK�DV�DXGLW� UHSRUWV��DJUHHG�XSRQ�SURFHGXUHV� OHWWHUV��DSSUDLVDOV��DFWXDULDO�UHSRUWV��HQJLQHHULQJ�UHSRUWV��OHJDO�RSLQLRQV�DQG�RWKHU�UHSRUWV�SURYLGHG�E\�WKLUG�SDUWLHV��WKH�DYDLODELOLW\�RI�LQGHSHQGHQW�DQG�FRPSHWHQW� WKLUG�SDUW\�YHULILFDWLRQ�VRXUFHV�ZLWK�UHVSHFW�WR�WKH�SDUWLFXODU�VHFXULW\�RU� LQ� WKH�SDUWLFXODU� MXULVGLFWLRQ�RI� WKH�LVVXHU��DQG�D�YDULHW\�RI�RWKHU�IDFWRUV��

8VHUV�RI�)LWFK¶V�UDWLQJV�VKRXOG�XQGHUVWDQG�WKDW�QHLWKHU�DQ�HQKDQFHG�IDFWXDO�LQYHVWLJDWLRQ�QRU�DQ\�WKLUG�SDUW\�YHULILFDWLRQ�FDQ�HQVXUH�WKDW�DOO�RI� WKH� LQIRUPDWLRQ�)LWFK� UHOLHV�RQ�LQ�FRQQHFWLRQ�ZLWK�D�UDWLQJ�ZLOO�EH�DFFXUDWH�DQG�FRPSOHWH��8OWLPDWHO\�� WKH� LVVXHU�DQG� LWV�DGYLVHUV�DUH�UHVSRQVLEOH�IRU�WKH�DFFXUDF\�RI�WKH�LQIRUPDWLRQ�WKH\�SURYLGH�WR�)LWFK�DQG�WR�WKH�PDUNHW�LQ�RIIHULQJ�GRFXPHQWV�DQG�RWKHU�UHSRUWV�� ,Q� LVVXLQJ� LWV� UDWLQJV� )LWFK� PXVW� UHO\� RQ�W KH� ZRUN� RI� H[SHUWV�� LQFOXGLQJ� LQGHSHQGHQW� DXGLWRUV� ZLWK� UHVSHFW� WR� ILQDQFLDO�VWDWHPHQWV� DQG� DWWRUQH\V� ZLWK� UHVSHFW� WR� OHJDO� DQG� WD[� PDWWHUV�� )XUWKHU�� UDWLQJV� DUH� LQKHUHQWO\� IRUZDUG�ORRNLQJ� DQG� HPERG\�DVVXPSWLRQV�DQG�SUHGLFWLRQV�DERXW�IXWXUH�HYHQWV�WKDW�E\�WKHLU�QDWXUH�FDQQRW�EH�YHULILHG�DV�IDFWV��$V�D�UHVXOW��GHVSLWH�DQ\�YHULILFDWLRQ�RI�FXUUHQW�IDFWV��UDWLQJV�FDQ�EH�DIIHFWHG�E\�IXWXUH�HYHQWV�RU�FRQGLWLRQV�WKDW�ZHUH�QRW�DQWLFLSDWHG�DW�WKH�WLPH�D�UDWLQJ�ZDV�LVVXHG�RU�DIILUPHG��,I�DQ\�VXFK�LQIRUPDWLRQ�VKRXOG�WXUQ�RXW�WR�FRQWDLQ�PLVUHSUHVHQWDWLRQV�RU�WR�EH�RWKHUZLVH�PLVOHDGLQJ��WKH�UDWLQJ�DVVRFLDWHG�ZLWK�WKDW�LQIRUPDWLRQ�PD\�QRW�EH�DSSURSULDWH��7KH�DVVLJQPHQW�RI�D�UDWLQJ�WR�DQ\�LVVXHU�RU�DQ\�VHFXULW\�VKRXOG�QRW�EH�YLHZHG�DV�D�JXDUDQWHH� RI� WKH� DFFXUDF\�� FRPSOHWHQHVV�� RU� WLPHOLQHVV� RI� WKH� LQIRUPDWLRQ� UHOLHG� RQ� LQ� FRQQHFWLRQ� ZLWK� WKH� UDWLQJ� RU� WKH� UHVXOWV�REWDLQHG�IURP�WKH�XVH�RI�VXFK�LQIRUPDWLRQ��

,I�D�UDWLQJ�GRHV�QRW�EHQHILW�IURP�WKH�SDUWLFLSDWLRQ�RI�WKH�LVVXHU�RULJLQDWRU��EXW�)LWFK�LV�VDWLVILHG�WKDW�³PLQLPXP�WKUHVKROG´�LQIRUPDWLRQ�IRU�WKH�JLYHQ�FULWHULD�LV�DYDLODEOH�IURP�SXEOLF�LQIRUPDWLRQ�DQG�RWKHU�VRXUFHV�DYDLODEOH�WR�)LWFK��WKHQ�WKH�QRQ�SDUWLFLSDWRU\�LVVXHU��DV�ZLWK�DOO�LVVXHUV��ZLOO�EH�DIIRUGHG�WKH�RSSRUWXQLW\�WR�FRPPHQW�RQ�WKH�UDWLQJ�RSLQLRQ�DQG�VXSSRUWLQJ�UHVHDUFK�SULRU�WR�LW�EHLQJ�SXEOLVKHG���

5DWLQJV�GR�QRW�FRQVWLWXWH�UHFRPPHQGDWLRQV�WR�EX\��VHOO��RU�KROG�DQ\�VHFXULW\��QRU�GR�WKH\�FRPPHQW�RQ�WKH�DGHTXDF\�RI�PDUNHW�SULFH��WKH�VXLWDELOLW\�RI�DQ\�VHFXULW\�IRU�D�SDUWLFXODU�LQYHVWRU��RU�WKH�WD[�H[HPSW�QDWXUH�RU�WD[DELOLW\�RI�DQ\�SD\PHQWV�RI�DQ\�VHFXULW\��)LWFK�

Page 5: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\����������

5DWLQJV�GRHV�QRW�KDYH�D�ILGXFLDU\�UHODWLRQVKLS�ZLWK�DQ\�LVVXHU��VXEVFULEHU�RU�DQ\�RWKHU�LQGLYLGXDO��1RWKLQJ�LV�LQWHQGHG�WR�RU�VKRXOG�EH�FRQVWUXHG� DV� FUHDWLQJ� D�I LGXFLDU\� UHODWLRQVKLS�EHWZHHQ�)LWFK�5DWLQJV� DQG� DQ\� LVVXHU� RU� EHWZHHQ� WKH� DJHQF\� DQG�DQ\� XVHU� RI� LWV�UDWLQJV�� )LWFK� 5DWLQJV� GRHV� QRW� SURYLGH� WR� DQ\� SDUW\� DQ\� ILQDQFLDO� DGYLFH�� RU� OHJDO�� DXGLWLQJ�� DFFRXQWLQJ�� DSSUDLVDO�� YDOXDWLRQ� RU�DFWXDULDO�VHUYLFHV��$�UDWLQJ�VKRXOG�QRW�EH�YLHZHG�DV�D�UHSODFHPHQW�IRU�VXFK�DGYLFH�RU�VHUYLFHV���

5DWLQJV�PD\�EH�FKDQJHG��TXDOLILHG��SODFHG�RQ�5DWLQJ�:DWFK��2XWORRNV�DVVLJQHG���PRGLILHG�RU�ZLWKGUDZQ�DV�D�UHVXOW�RI�FKDQJHV�LQ��DGGLWLRQV�WR��DFFXUDF\�RI��XQDYDLODELOLW\�RI�RU�LQDGHTXDF\�RI�LQIRUPDWLRQ�RU�IRU�DQ\�UHDVRQ�)LWFK�5DWLQJV�GHHPV�VXIILFLHQW���

7KH�DVVLJQPHQW�RI�D�UDWLQJ�E\�)LWFK�5DWLQJV�VKDOO�QRW�FRQVWLWXWH�FRQVHQW�E\�WKH�DJHQF\�WR�XVH�LWV�QDPH�DV�DQ�H[SHUW�LQ�FRQQHFWLRQ�ZLWK�DQ\�UHJLVWUDWLRQ�VWDWHPHQW��RIIHULQJ�GRFXPHQW�RU�RWKHU�ILOLQJV�XQGHU�DQ\�UHOHYDQW�VHFXULWLHV�ODZV���

Page 6: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\����������

Introduction )LWFK�5DWLQJV�SXEOLVKHV�RSLQLRQV�RQ�D�YDULHW\�RI�VFDOHV��7KH�PRVW�FRPPRQ�RI�WKHVH�DUH�FUHGLW�UDWLQJV��EXW�WKH�DJHQF\�DOVR� SXEOLVKHV� UDWLQJV�� VFRUHV� DQG�RW KHU� UHODWLYH� RSLQLRQV� UHODWLQJ� WR� ILQDQFLDO� RU� RSHUDWLRQDO� VWUHQJWK�� )RU� H[DPSOH��)LWFK�5DWLQJV�DOVR�SURYLGHV�VSHFLDOL]HG�UDWLQJV�RI�VHUYLFHUV�RI�UHVLGHQWLDO�DQG�FRPPHUFLDO�PRUWJDJHV��DVVHW�PDQDJHUV�DQG�IXQGV��,Q�HDFK�FDVH��XVHUV�VKRXOG�UHIHU�WR�WKH�GHILQLWLRQV�RI�HDFK�LQGLYLGXDO�VFDOH�IRU�JXLGDQFH�RQ�WKH�GLPHQVLRQV�RI�ULVN�FRYHUHG�LQ�HDFK�DVVHVVPHQW��

$�� &UHGLW�5DWLQJ�6FDOHV�)LWFK�5DWLQJV¶�FUHGLW�UDWLQJV�SURYLGH�DQ�RSLQLRQ�RQ�WKH�UHODWLYH�DELOLW\�RI�DQ�HQWLW\�WR�PHHW�ILQDQFLDO�FRPPLWPHQWV��VXFK�DV�LQWHUHVW��SUHIHUUHG�GLYLGHQGV��UHSD\PHQW�RI�SULQFLSDO��LQVXUDQFH�FODLPV�RU�FRXQWHUSDUW\�REOLJDWLRQV��&UHGLW�UDWLQJV�DUH�XVHG�E\�LQYHVWRUV�DV�LQGLFDWLRQV�RI�WKH�OLNHOLKRRG�RI�UHFHLYLQJ�WKH�PRQH\�RZHG�WR�WKHP�LQ�DFFRUGDQFH�ZLWK�WKH�WHUPV�RQ�ZKLFK� WKH\� LQYHVWHG�� 7KH� DJHQF\¶V� FUHGLW� UDWLQJV� FRYHU� WKH� JOREDO� VSHFWUXP� RI� FRUSRUDWH�� VRYHUHLJQ� �LQFOXGLQJ�VXSUDQDWLRQDO� DQG� VXE�QDWLRQDO��� ILQDQFLDO�� EDQN�� LQVXUDQFH�� PXQLFLSDO� DQG� RWKHU� SXEOLF� ILQDQFH� HQWLWLHV� DQG� WKH�VHFXULWLHV� RU� RWKHU� REOLJDWLRQV� WKH\� LVVXH�� DV� ZHOO� DV� VWUXFWXUHG� ILQDQFH� VHFXULWLHV� EDFNHG� E\� UHFHLYDEOHV� RU� RWKHU�ILQDQFLDO�DVVHWV���7KH�WHUPV�³LQYHVWPHQW�JUDGH´�DQG�³VSHFXODWLYH�JUDGH´�KDYH�HVWDEOLVKHG�WKHPVHOYHV�RYHU�WLPH�DV�VKRUWKDQG�WR�GHVFULEH�WKH�FDWHJRULHV�µ$$$¶�WR�µ%%%¶��LQYHVWPHQW�JUDGH��DQG�µ%%¶�WR�µ'¶��VSHFXODWLYH�JUDGH���7KH�WHUPV�³LQYHVWPHQW�JUDGH´�DQG�³VSHFXODWLYH� JUDGH´� DUH� PDUNHW� FRQYHQWLRQV�� DQG� GR� QRW� LPSO\� DQ\� UHFRPPHQGDWLRQ� RU� HQGRUVHPHQW� RI� D� VSHFLILF�VHFXULW\� IRU� LQYHVWPHQW�SXUSRVHV�� ³,QYHVWPHQW�JUDGH´� FDWHJRULHV� LQGLFDWH� UHODWLYHO\� ORZ� WR�PRGHUDWH�FUHGLW� ULVN��ZKLOH�UDWLQJV�LQ�WKH�³VSHFXODWLYH´�FDWHJRULHV�HLWKHU�VLJQDO�D�KLJKHU�OHYHO�RI�FUHGLW�ULVN�RU�WKDW�D�GHIDXOW�KDV�DOUHDG\�RFFXUUHG����$�GHVLJQDWLRQ�RI��1RW�5DWHG��RU��15��LV�XVHG�WR�GHQRWH�VHFXULWLHV�QRW�UDWHG�E\�)LWFK�ZKHUH�)LWFK�KDV�UDWHG�VRPH��EXW�QRW�DOO��VHFXULWLHV�FRPSULVLQJ�DQ�LVVXDQFH�FDSLWDO�VWUXFWXUH���&UHGLW�UDWLQJV�H[SUHVV�ULVN�LQ�UHODWLYH�UDQN�RUGHU��ZKLFK�LV� WR�VD\�WKH\�DUH�RUGLQDO�PHDVXUHV�RI�FUHGLW�ULVN�DQG�DUH�QRW�SUHGLFWLYH�RI�D�VSHFLILF�IUHTXHQF\�RI�GHIDXOW�RU�ORVV��)RU�LQIRUPDWLRQ�DERXW�WKH�KLVWRULFDO�SHUIRUPDQFH�RI�UDWLQJV�SOHDVH�UHIHU�WR�)LWFK¶V�5DWLQJV�7UDQVLWLRQ�DQG�'HIDXOW�VWXGLHV�ZKLFK�GHWDLO�WKH�KLVWRULFDO�GHIDXOW�UDWHV�DQG�WKHLU�PHDQLQJ��7KH�(XURSHDQ�6HFXULWLHV�DQG�0DUNHWV�$XWKRULW\�DOVR�PDLQWDLQV�D�FHQWUDO�UHSRVLWRU\�RI�UDWLQJ�GHIDXOW�UDWHV����)LWFK�5DWLQJV¶�FUHGLW�UDWLQJV�GR�QRW�GLUHFWO\�DGGUHVV�DQ\�ULVN�RWKHU�WKDQ�FUHGLW�ULVN��,Q�SDUWLFXODU��UDWLQJV�GR�QRW�GHDO�ZLWK�WKH� ULVN� RI� D� PDUNHW� YDOXH� ORVV� RQ� D� UDWHG� VHFXULW\� GXH� WR� FKDQJHV� LQ� LQWHUHVW� UDWHV�� OLTXLGLW\� DQG� RWKHU� PDUNHW�FRQVLGHUDWLRQV��+RZHYHU�� LQ� WHUPV�RI�SD\PHQW�REOLJDWLRQ�RQ� WKH� UDWHG� OLDELOLW\��PDUNHW� ULVN�PD\�EH�FRQVLGHUHG� WR� WKH�H[WHQW�WKDW�LW�LQIOXHQFHV�WKH�ability�RI�DQ�LVVXHU�WR�SD\�XSRQ�D�FRPPLWPHQW��5DWLQJV�QRQHWKHOHVV�GR�QRW�UHIOHFW�PDUNHW�ULVN�WR�WKH�H[WHQW�WKDW�WKH\�LQIOXHQFH�WKH�VL]H�RU�RWKHU�FRQGLWLRQDOLW\�RI�WKH�obligation�WR�SD\�XSRQ�D�FRPPLWPHQW��IRU�H[DPSOH��LQ�WKH�FDVH�RI�LQGH[�OLQNHG�ERQGV�����,Q�WKH�GHIDXOW�FRPSRQHQWV�RI�UDWLQJV�DVVLJQHG�WR�LQGLYLGXDO�REOLJDWLRQV�RU�LQVWUXPHQWV��WKH�DJHQF\�W\SLFDOO\�UDWHV�WR�WKH�OLNHOLKRRG�RI�QRQ�SD\PHQW�RU�GHIDXOW�LQ�DFFRUGDQFH�ZLWK�WKH�WHUPV�RI�WKDW�LQVWUXPHQW¶V�GRFXPHQWDWLRQ��,Q�OLPLWHG�FDVHV��)LWFK�5DWLQJV�PD\� LQFOXGH� DGGLWLRQDO� FRQVLGHUDWLRQV� �L�H�� UDWH� WR� D�KL JKHU� RU� ORZHU� VWDQGDUG� WKDQ� WKDW� LPSOLHG� LQ� WKH�REOLJDWLRQ¶V� GRFXPHQWDWLRQ��� ,Q� VXFK� FDVHV�� WKH� DJHQF\� ZLOO� PDNH� FOHDU� WKH� DVVXPSWLRQV� XQGHUO\LQJ� WKH� DJHQF\¶V�RSLQLRQ�LQ�WKH�DFFRPSDQ\LQJ�UDWLQJ�FRPPHQWDU\���

Page 7: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\����������

6XPPDU\�RI�3ULPDU\�6FDOHV�$���,QWHUQDWLRQDO�,VVXHU�DQG�&UHGLW�5DWLQJ�6FDOHV�,QWHUQDWLRQDO�FUHGLW�UDWLQJV�UHODWH�WR�HLWKHU�IRUHLJQ�FXUUHQF\�RU�ORFDO�FXUUHQF\�FRPPLWPHQWV�DQG��LQ�ERWK�FDVHV��DVVHVV�WKH�FDSDFLW\� WR�PHHW� WKHVH�FRPPLWPHQWV�XVLQJ�D�JOREDOO\�DSSOLFDEOH�VFDOH��$V�VXFK��ERWK� IRUHLJQ�FXUUHQF\�DQG� ORFDO�FXUUHQF\�LQWHUQDWLRQDO�UDWLQJV�DUH�LQWHUQDWLRQDOO\�FRPSDUDEOH�DVVHVVPHQWV���

7KH�ORFDO�FXUUHQF\�LQWHUQDWLRQDO�UDWLQJ�PHDVXUHV�WKH�OLNHOLKRRG�RI�UHSD\PHQW�LQ�WKH�FXUUHQF\�RI�WKH�MXULVGLFWLRQ�LQ�ZKLFK�WKH� LVVXHU� LV�GRPLFLOHG�DQG�KHQFH�GRHV�QRW� WDNH�DFFRXQW�RI� WKH�SRVVLELOLW\� WKDW� LW�ZLOO�QRW�EH�SRVVLEOH�WR�FRQYHUW� ORFDO�FXUUHQF\� LQWR� IRUHLJQ� FXUUHQF\�� RU� PDNH� WUDQVIHUV� EHWZHHQ� VRYHUHLJQ� MXULVGLFWLRQV� �WUDQVIHU� DQG�F RQYHUWLELOLW\� �7&��ULVN���

)RUHLJQ�FXUUHQF\� UDWLQJV� DGGLWLRQDOO\� FRQVLGHU� WKH�SURILOH� RI� WKH� LVVXHU�RU� QRWH� DIWHU� WDNLQJ� LQWR�DFFRXQW� WUDQVIHU�DQG�FRQYHUWLELOLW\� ULVN��7KLV� ULVN� LV� XVXDOO\� FRPPXQLFDWHG� IRU� GLIIHUHQW� FRXQWULHV� E\� WKH�&RXQWU\�&HLOLQJ��ZKLFK� ³FDSV´� WKH�IRUHLJQ�FXUUHQF\�UDWLQJV�RI�PRVW��WKRXJK�QRW�DOO��LVVXHUV�ZLWKLQ�D�JLYHQ�FRXQWU\��

:KHUH�WKH�UDWLQJ� LV�QRW�H[SOLFLWO\�GHVFULEHG� LQ�WKH�UHOHYDQW�UDWLQJ�DFWLRQ�FRPPHQWDU\�DV� ORFDO�RU� IRUHLJQ�FXUUHQF\�� WKH�UHDGHU� VKRXOG� DVVXPH� WKDW� WKH� UDWLQJ� LV� D�³ IRUHLJQ� FXUUHQF\´� UDWLQJ� �L�H�� WKH� UDWLQJ� LV� DSSOLFDEOH� IRU� DOO� FRQYHUWLEOH�FXUUHQFLHV�RI�REOLJDWLRQ���

$���5HFRYHU\�5DWLQJV�7KH�5HFRYHU\� 5DWLQJ� VFDOH� LV� EDVHG� XSRQ� WKH� H[SHFWHG� UHODWLYH� UHFRYHU\� FKDUDFWHULVWLFV� RI� DQ�R EOLJDWLRQ� XSRQ� WKH�FXULQJ�RI�D�GHIDXOW��HPHUJHQFH�IURP�LQVROYHQF\��EDQNUXSWF\�RU�IROORZLQJ�D�OLTXLGDWLRQ�RU�WHUPLQDWLRQ�RI�WKH�REOLJRU�RU�LWV�DVVRFLDWHG�FROODWHUDO��$V�VXFK��ZKLOH�WKH�GHILQLWLRQV�FLWH�URXJK�SHUFHQWDJH�EDQGV�RI�UHFRYHU\�JLYHQ�GHIDXOW�WR�LOOXVWUDWH�UHODWLYH�RUGHUV�RI�PDJQLWXGH��LW�LV�DQ�RUGLQDO�VFDOH��DQG�GRHV�QRW�DWWHPSW�WR�SUHFLVHO\�SUHGLFW�D�JLYHQ�OHYHO�RI�UHFRYHU\��

$���2WKHU�,QWHUQDWLRQDO�&UHGLW�5DWLQJV�)LWFK�5DWLQJV�SURYLGHV�9LDELOLW\�DQG�6XSSRUW�5DWLQJV�RI�EDQNV��ZKLFK�RSLQH�RQ�WKH�OLNHOLKRRG�WKDW�D�EDQN�ZRXOG�UXQ�LQWR�VLJQLILFDQW� ILQDQFLDO� GLIILFXOWLHV� VXFK� WKDW� LW�ZRXOG� UHTXLUH� VXSSRUW� DQG�� LQ� WKDW� HYHQW�� WKH� OLNHOLKRRG� WKDW� LW�ZLOO� UHFHLYH�H[WHUQDO�VXSSRUW��$GGLWLRQDOO\��WKH�DJHQF\�DVVLJQV�UDWLQJV�WR�LQVXUDQFH�FRPSDQLHV��UHIOHFWLQJ�WKHLU�ILQDQFLDO�VWUHQJWK��

$���1DWLRQDO�&UHGLW�5DWLQJV�,Q�FHUWDLQ�PDUNHWV��)LWFK�5DWLQJV�SURYLGHV�1DWLRQDO�5DWLQJV��ZKLFK�DUH�DQ�DVVHVVPHQW�RI�FUHGLW�TXDOLW\�UHODWLYH�WR�WKH�UDWLQJ� RI� WKH� ORZHVW� FUHGLW� ULVN� LQ� D�F RXQWU\�� 7KLV� ORZHVW� ULVN� ZLOO� QRUPDOO\�� DOWKRXJK� QRW� DOZD\V�� EH� DVVLJQHG� WR� DOO�ILQDQFLDO� FRPPLWPHQWV� LVVXHG� RU� JXDUDQWHHG� E\� WKH� VRYHUHLJQ� VWDWH�� 1DWLRQDO� 5DWLQJV� DUH� QRW� LQWHQGHG� WR� EH�LQWHUQDWLRQDOO\� FRPSDUDEOH� DQG� DUH� GHQRWHG� E\� D� VSHFLDO� LGHQWLILHU� IRU� WKH� FRXQWU\� FRQFHUQHG�� 7KH� SHUIRUPDQFH� RI�1DWLRQDO�5DWLQJV�ZLOO�DOVR�QRW�EH�VWULFWO\�FRPSDUDEOH�RYHU� WLPH��JLYHQ�WKH�PRYLQJ�FDOLEUDWLRQ�RI�WKH�HQWLUH�VFDOH�WR�WKH�HQWLW\�RU�HQWLWLHV�ZLWK�WKH�ORZHVW�FUHGLW�ULVN�LQ�D�FRXQWU\��ZKRVH�FUHGLWZRUWKLQHVV�UHODWLYH�WR�RWKHU�HQWLWLHV�LQWHUQDWLRQDOO\�PD\�FKDQJH�VLJQLILFDQWO\�RYHU�WLPH���

$���&RXQWU\�&HLOLQJV�&RXQWU\�&HLOLQJV�UHIOHFW�WKH�DJHQF\¶V�MXGJPHQW�UHJDUGLQJ�WKH�ULVN�RI�FDSLWDO�DQG�H[FKDQJH�FRQWUROV�EHLQJ� LPSRVHG�E\�WKH�VRYHUHLJQ�DXWKRULWLHV�WKDW�ZRXOG�SUHYHQW�RU�PDWHULDOO\� LPSHGH�WKH�SULYDWH�VHFWRU¶V�DELOLW\� WR�FRQYHUW� ORFDO�FXUUHQF\�LQWR�IRUHLJQ�FXUUHQF\�DQG�WUDQVIHU�WR�QRQ�UHVLGHQW�FUHGLWRUV�±�WUDQVIHU�DQG�FRQYHUWLELOLW\�ULVN��

$���$GGLWLRQDO�8VDJH�RI�3ULPDU\�&UHGLW�5DWLQJ�6FDOHV� 1 2Q�0DUFK�����������)LWFK�GHWHUPLQHG�LW�ZRXOG�UHFDOLEUDWH�LWV�8�6��3XEOLF�)LQDQFH�UDWLQJV�LQ�FHUWDLQ�VHFWRUV�WR�PDLQWDLQ�WKHLU�FRPSDUDELOLW\�ZLWK�RWKHU�LQWHUQDWLRQDO�FUHGLW�UDWLQJV���Recalibration of U.S. Public Finance Ratings����5DWLQJ�UHFDOLEUDWLRQV�RI�WKH�8�6��VWDWHV��&RPPRQZHDOWK�RI�3XHUWR�5LFR��'LVWULFW�RI�&ROXPELD��DQG�1HZ�<RUN�&LW\�ZHUH�LPSOHPHQWHG�RQ�$SULO����������DQG�WKH�UHPDLQLQJ�DIIHFWHG�UDWLQJ�UHFDOLEUDWLRQV�ZHUH�LPSOHPHQWHG�RQ�$SULO�����������

Page 8: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\����������

7KH�SULPDU\�FUHGLW�UDWLQJ�VFDOHV�PD\�EH�XVHG�WR�SURYLGH�D�FUHGLW�RSLQLRQ�RI�SULYDWHO\�LVVXHG�REOLJDWLRQV�RU�FHUWDLQ�QRWH�LVVXDQFH�SURJUDPV��7KH�SULPDU\�FUHGLW� UDWLQJ�VFDOHV�PD\�DOVR�EH�XVHG� WR�SURYLGH�D�FUHGLW�RSLQLRQ�RI�D�PRUH�QDUURZ�VFRSH��LQFOXGLQJ�LQWHUHVW�VWULSV�DQG�UHWXUQ�RI�SULQFLSDO��

Page 9: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\����������

$��� ,QWHUQDWLRQDO�,VVXHU�DQG�&UHGLW�5DWLQJ�6FDOHV�7KH�3ULPDU\�&UHGLW�5DWLQJ�6FDOHV��WKRVH�IHDWXULQJ�WKH�V\PEROV�µ$$$¶�µ'¶�DQG�µ)�¶�µ'¶��DUH�XVHG�IRU�GHEW�DQG�ILQDQFLDO�VWUHQJWK�UDWLQJV��7KH�EHORZ�VHFWLRQ�GHVFULEHV�WKHLU�XVH�IRU�LVVXHUV�DQG�REOLJDWLRQV�LQ�FRUSRUDWH��SXEOLF�DQG�VWUXFWXUHG�ILQDQFH�GHEW�PDUNHWV��)RU�WKHLU�XVH�LQ�WKH�FRQWH[W�RI�IXQGV��SOHDVH�UHIHU�WR�VHFWLRQ�%������

$����� /RQJ�7HUP�5DWLQJ�6FDOHV�$��������,VVXHU�&UHGLW�5DWLQJ�6FDOHV�5DWHG� HQWLWLHV� LQ� D�Q XPEHU� RI� VHFWRUV�� LQFOXGLQJ� ILQDQFLDO� DQG� QRQ�ILQDQFLDO� FRUSRUDWLRQV�� VRYHUHLJQV� DQG� LQVXUDQFH�FRPSDQLHV�� DUH� JHQHUDOO\� DVVLJQHG� ,VVXHU�'HIDXOW� 5DWLQJV� �,'5V��� ,'5V�RSLQH� RQ� DQ� HQWLW\¶V� UHODWLYH� YXOQHUDELOLW\� WR�GHIDXOW� RQ� ILQDQFLDO� REOLJDWLRQV�� 7KH� ³WKUHVKROG´� GHIDXOW� ULVN� DGGUHVVHG� E\� WKH� ,'5� LV� JHQHUDOO\� WKDW� RI� WKH� ILQDQFLDO�REOLJDWLRQV� ZKRVH� QRQ�SD\PHQW� ZRXOG� EHVW� UHIOHFW� WKH� XQFXUHG� IDLOXUH� RI� WKDW� HQWLW\�� $V� VXFK�� ,'5V� DOVR� DGGUHVV�UHODWLYH�YXOQHUDELOLW\�WR�EDQNUXSWF\��DGPLQLVWUDWLYH�UHFHLYHUVKLS�RU�VLPLODU�FRQFHSWV��DOWKRXJK�WKH�DJHQF\�UHFRJQL]HV�WKDW�LVVXHUV�PD\�DOVR�PDNH�SUH�HPSWLYH�DQG�WKHUHIRUH�YROXQWDU\�XVH�RI�VXFK�PHFKDQLVPV����,Q�DJJUHJDWH�� ,'5V�SURYLGH�DQ�RUGLQDO� UDQNLQJ�RI� LVVXHUV�EDVHG�RQ� WKH�DJHQF\¶V�YLHZ�RI� WKHLU� UHODWLYH�YXOQHUDELOLW\� WR�GHIDXOW��UDWKHU�WKDQ�D�SUHGLFWLRQ�RI�D�VSHFLILF�SHUFHQWDJH�OLNHOLKRRG�RI�GHIDXOW��)RU�KLVWRULFDO� LQIRUPDWLRQ�RQ�WKH�GHIDXOW�H[SHULHQFH�RI�)LWFK�UDWHG�LVVXHUV��SOHDVH�FRQVXOW�WKH�WUDQVLWLRQ�DQG�GHIDXOW�SHUIRUPDQFH�VWXGLHV�DYDLODEOH�IURP�WKH�)LWFK�5DWLQJV�ZHEVLWH���AAA: Highest credit quality. µ$$$¶� UDWLQJV�GHQRWH� WKH� ORZHVW�H[SHFWDWLRQ�RI�GHIDXOW� ULVN��7KH\�DUH�DVVLJQHG�RQO\� LQ� FDVHV�RI�H[FHSWLRQDOO\� VWURQJ�FDSDFLW\�IRU�SD\PHQW�RI�ILQDQFLDO�FRPPLWPHQWV��7KLV�FDSDFLW\�LV�KLJKO\�XQOLNHO\�WR�EH�DGYHUVHO\�DIIHFWHG�E\�IRUHVHHDEOH�HYHQWV���AA: Very high credit quality. µ$$¶� UDWLQJV�GHQRWH�H[SHFWDWLRQV�RI�YHU\� ORZ�GHIDXOW� ULVN��7KH\� LQGLFDWH�YHU\�VWURQJ�FDSDFLW\� IRU�SD\PHQW�RI� ILQDQFLDO�FRPPLWPHQWV��7KLV�FDSDFLW\�LV�QRW�VLJQLILFDQWO\�YXOQHUDEOH�WR�IRUHVHHDEOH�HYHQWV���A: High credit quality. µ$¶� UDWLQJV�GHQRWH�H[SHFWDWLRQV�RI� ORZ�GHIDXOW� ULVN��7KH�FDSDFLW\� IRU�SD\PHQW�RI� ILQDQFLDO�FRPPLWPHQWV� LV�FRQVLGHUHG�VWURQJ��7KLV�FDSDFLW\�PD\��QHYHUWKHOHVV��EH�PRUH�YXOQHUDEOH�WR�DGYHUVH�EXVLQHVV�RU�HFRQRPLF�FRQGLWLRQV�WKDQ� LV� WKH�FDVH�IRU�KLJKHU�UDWLQJV���BBB: Good credit quality. µ%%%¶� UDWLQJV� LQGLFDWH� WKDW� H[SHFWDWLRQV� RI� GHIDXOW� ULVN� DUH� FXUUHQWO\� ORZ�� 7KH� FDSDFLW\� IRU� SD\PHQW� RI� ILQDQFLDO�FRPPLWPHQWV� LV� FRQVLGHUHG� DGHTXDWH� EXW� DGYHUVH� EXVLQHVV� RU� HFRQRPLF� FRQGLWLRQV� DUH� PRUH� OLNHO\� WR� LPSDLU� WKLV�FDSDFLW\���BB: Speculative. µ%%¶�UDWLQJV�LQGLFDWH�DQ�HOHYDWHG�YXOQHUDELOLW\�WR�GHIDXOW�ULVN��SDUWLFXODUO\�LQ�WKH�HYHQW�RI�DGYHUVH�FKDQJHV�LQ�EXVLQHVV�RU�HFRQRPLF�FRQGLWLRQV�RYHU�WLPH��KRZHYHU��EXVLQHVV�RU�ILQDQFLDO�IOH[LELOLW\�H[LVWV�ZKLFK�VXSSRUWV�WKH�VHUYLFLQJ�RI�ILQDQFLDO�FRPPLWPHQWV���B: Highly speculative. µ%¶�UDWLQJV�LQGLFDWH�WKDW�PDWHULDO�GHIDXOW�ULVN�LV�SUHVHQW��EXW�D�OLPLWHG�PDUJLQ�RI�VDIHW\�UHPDLQV��)LQDQFLDO�FRPPLWPHQWV�DUH� FXUUHQWO\� EHLQJ�PHW�� KRZHYHU�� FDSDFLW\� IRU� FRQWLQXHG�SD\PHQW� LV� YXOQHUDEOH� WR�GHWHULRUDWLRQ� LQ� WKH�EXVLQHVV�DQG�HFRQRPLF�HQYLURQPHQW���

Page 10: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

CCC: Substantial credit risk. 'HIDXOW�LV�D�UHDO�SRVVLELOLW\����CC: Very high levels of credit risk. 'HIDXOW�RI�VRPH�NLQG�DSSHDUV�SUREDEOH���C: Exceptionally high levels of credit risk 'HIDXOW�LV�LPPLQHQW�RU�LQHYLWDEOH��RU�WKH�LVVXHU�LV�LQ�VWDQGVWLOO��&RQGLWLRQV�WKDW�DUH�LQGLFDWLYH�RI�D�µ&¶�FDWHJRU\�UDWLQJ�IRU�DQ�LVVXHU�LQFOXGH��D�� WKH�LVVXHU�KDV�HQWHUHG�LQWR�D�JUDFH�RU�FXUH�SHULRG�IROORZLQJ�QRQ�SD\PHQW�RI�D�PDWHULDO�ILQDQFLDO�REOLJDWLRQ��E�� WKH�LVVXHU�KDV�HQWHUHG�LQWR�D�WHPSRUDU\�QHJRWLDWHG�ZDLYHU�RU�VWDQGVWLOO�DJUHHPHQW�IROORZLQJ�D�SD\PHQW�GHIDXOW�RQ�D�

PDWHULDO�ILQDQFLDO�REOLJDWLRQ���RU�F�� )LWFK�5DWLQJV�RWKHUZLVH�EHOLHYHV�D�FRQGLWLRQ�RI�µ5'¶�RU�µ'¶�WR�EH�LPPLQHQW�RU�LQHYLWDEOH��LQFOXGLQJ�WKURXJK�WKH�IRUPDO�

DQQRXQFHPHQW�RI�D�GLVWUHVVHG�GHEW�H[FKDQJH��

RD: Restricted default. µ5'¶�UDWLQJV�LQGLFDWH�DQ�LVVXHU�WKDW�LQ�)LWFK�5DWLQJV¶�RSLQLRQ�KDV�H[SHULHQFHG�DQ�XQFXUHG�SD\PHQW�GHIDXOW�RQ�D�ERQG��ORDQ�RU�RWKHU�PDWHULDO�ILQDQFLDO�REOLJDWLRQ�EXW�ZKLFK�KDV�QRW�HQWHUHG�LQWR�EDQNUXSWF\�ILOLQJV��DGPLQLVWUDWLRQ��UHFHLYHUVKLS��OLTXLGDWLRQ�RU�RWKHU�IRUPDO�ZLQGLQJ�XS�SURFHGXUH��DQG�ZKLFK�KDV�QRW�RWKHUZLVH�FHDVHG�RSHUDWLQJ��7KLV�ZRXOG�LQFOXGH��D�� WKH�VHOHFWLYH�SD\PHQW�GHIDXOW�RQ�D�VSHFLILF�FODVV�RU�FXUUHQF\�RI�GHEW��E�� WKH�XQFXUHG�H[SLU\�RI�DQ\�DSSOLFDEOH�JUDFH�SHULRG��FXUH�SHULRG�RU�GHIDXOW�IRUEHDUDQFH�SHULRG�IROORZLQJ�D�SD\PHQW�

GHIDXOW�RQ�D�EDQN�ORDQ��FDSLWDO�PDUNHWV�VHFXULW\�RU�RWKHU�PDWHULDO�ILQDQFLDO�REOLJDWLRQ��F�� WKH�H[WHQVLRQ�RI�PXOWLSOH�ZDLYHUV�RU�IRUEHDUDQFH�SHULRGV�XSRQ�D�SD\PHQW�GHIDXOW�RQ�RQH�RU�PRUH�PDWHULDO�ILQDQFLDO�

REOLJDWLRQV��HLWKHU�LQ�VHULHV�RU�LQ�SDUDOOHO��RU�G�� H[HFXWLRQ�RI�D�GLVWUHVVHG�GHEW�H[FKDQJH�RQ�RQH�RU�PRUH�PDWHULDO�ILQDQFLDO�REOLJDWLRQV��

D: Default. µ'¶� UDWLQJV� LQGLFDWH� DQ� LVVXHU� WKDW� LQ� )LWFK� 5DWLQJV¶� RSLQLRQ� KDV� HQWHUHG� LQWR� EDQNUXSWF\� ILOLQJV�� DGPLQLVWUDWLRQ��UHFHLYHUVKLS��OLTXLGDWLRQ�RU�RWKHU�IRUPDO�ZLQGLQJ�XS�SURFHGXUH��RU�ZKLFK�KDV�RWKHUZLVH�FHDVHG�EXVLQHVV���'HIDXOW� UDWLQJV�DUH�QRW�DVVLJQHG�SURVSHFWLYHO\� WR�HQWLWLHV�RU� WKHLU�REOLJDWLRQV��ZLWKLQ� WKLV�FRQWH[W��QRQ�SD\PHQW�RQ�DQ�LQVWUXPHQW� WKDW� FRQWDLQV� D� GHIHUUDO� IHDWXUH� RU� JUDFH� SHULRG� ZLOO� JHQHUDOO\� QRW� EH� FRQVLGHUHG� D� GHIDXOW� XQWLO� DIWHU� WKH�H[SLUDWLRQ� RI� WKH� GHIHUUDO� RU� JUDFH� SHULRG�� XQOHVV� D� GHIDXOW� LV� RWKHUZLVH� GULYHQ� E\� EDQNUXSWF\� RU� RWKHU� VLPLODU�FLUFXPVWDQFH��RU�E\�D�GLVWUHVVHG�GHEW�H[FKDQJH����³,PPLQHQW´�GHIDXOW�W\SLFDOO\�UHIHUV�WR�WKH�RFFDVLRQ�ZKHUH�D�SD\PHQW�GHIDXOW�KDV�EHHQ�LQWLPDWHG�E\�WKH�LVVXHU��DQG�LV�DOO�EXW� LQHYLWDEOH��7KLV�PD\��IRU�H[DPSOH��EH�ZKHUH�DQ�LVVXHU�KDV�PLVVHG�D�VFKHGXOHG�SD\PHQW��EXW��DV�LV�W\SLFDO��KDV�D�JUDFH�SHULRG�GXULQJ�ZKLFK�LW�PD\�FXUH�WKH�SD\PHQW�GHIDXOW��$QRWKHU�DOWHUQDWLYH�ZRXOG�EH�ZKHUH�DQ�LVVXHU�KDV�IRUPDOO\�DQQRXQFHG�D�GLVWUHVVHG�GHEW�H[FKDQJH��EXW�WKH�GDWH�RI�WKH�H[FKDQJH�VWLOO�OLHV�VHYHUDO�GD\V�RU�ZHHNV�LQ�WKH�LPPHGLDWH�IXWXUH���,Q�DOO�FDVHV��WKH�DVVLJQPHQW�RI�D�GHIDXOW�UDWLQJ�UHIOHFWV�WKH�DJHQF\¶V�RSLQLRQ�DV�WR�WKH�PRVW�DSSURSULDWH�UDWLQJ�FDWHJRU\�FRQVLVWHQW�ZLWK� WKH� UHVW�RI� LWV�XQLYHUVH�RI� UDWLQJV��DQG�PD\�GLIIHU� IURP� WKH�GHILQLWLRQ�RI�GHIDXOW�XQGHU� WKH� WHUPV�RI�DQ�LVVXHU¶V�ILQDQFLDO�REOLJDWLRQV�RU�ORFDO�FRPPHUFLDO�SUDFWLFH����Note: The modifiers “+” or “-” may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the ‘AAA’ Long-Term IDR category, or to Long-Term IDR categories below ‘B’. �

Page 11: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

/LPLWDWLRQV�RI�WKH�,VVXHU�&UHGLW�5DWLQJ�6FDOH�6SHFLILF�OLPLWDWLRQV�UHOHYDQW�WR�WKH�LVVXHU�FUHGLW�UDWLQJ�VFDOH�LQFOXGH��y� 7KH�UDWLQJV�GR�QRW�SUHGLFW�D�VSHFLILF�SHUFHQWDJH�RI�GHIDXOW�OLNHOLKRRG�RYHU�DQ\�JLYHQ�WLPH�SHULRG��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�PDUNHW�YDOXH�RI�DQ\�LVVXHU¶V�VHFXULWLHV�RU�VWRFN��RU�WKH�OLNHOLKRRG�WKDW�WKLV�YDOXH�PD\�FKDQJH��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�OLTXLGLW\�RI�WKH�LVVXHU¶V�VHFXULWLHV�RU�VWRFN��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�SRVVLEOH�ORVV�VHYHULW\�RQ�DQ�REOLJDWLRQ�VKRXOG�DQ�LVVXHU�GHIDXOW��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�VXLWDELOLW\�RI�DQ�LVVXHU�DV�FRXQWHUSDUW\�WR�WUDGH�FUHGLW��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�DQ\�TXDOLW\�UHODWHG�WR�DQ�LVVXHU¶V�EXVLQHVV��RSHUDWLRQDO�RU�ILQDQFLDO�SURILOH�RWKHU�WKDQ�WKH�DJHQF\¶V�

RSLQLRQ�RQ�LWV�UHODWLYH�YXOQHUDELOLW\�WR�GHIDXOW���5DWLQJV�DVVLJQHG�E\�)LWFK�5DWLQJV�DUWLFXODWH�DQ�RSLQLRQ�RQ�GLVFUHWH�DQG�VSHFLILF�DUHDV�RI�ULVN��7KH�DERYH�OLVW�LV�QRW�H[KDXVWLYH��DQG�LV�SURYLGHG�IRU�WKH�UHDGHU¶V�FRQYHQLHQFH��5HDGHUV�DUH�UHTXHVWHG�WR�UHYLHZ�WKH�VHFWLRQ�Understanding Credit Ratings - Limitations and Usage�IRU�IXUWKHU�LQIRUPDWLRQ�RQ�WKH�OLPLWDWLRQV�RI�WKH�DJHQF\¶V�UDWLQJV���

Page 12: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$���������&RUSRUDWH�)LQDQFH�2EOLJDWLRQV�±�/RQJ�7HUP�5DWLQJ�6FDOHV�5DWLQJV�RI�LQGLYLGXDO�VHFXULWLHV�RU�ILQDQFLDO�REOLJDWLRQV�RI�D�FRUSRUDWH�LVVXHU�DGGUHVV�UHODWLYH�YXOQHUDELOLW\�WR�GHIDXOW�RQ�DQ�RUGLQDO�VFDOH��,Q�DGGLWLRQ��IRU�ILQDQFLDO�REOLJDWLRQV�LQ�FRUSRUDWH�ILQDQFH��D�PHDVXUH�RI�UHFRYHU\�JLYHQ�GHIDXOW�RQ�WKDW�OLDELOLW\�LV�DOVR�LQFOXGHG�LQ�WKH�UDWLQJ�DVVHVVPHQW��7KLV�QRWDEO\�DSSOLHV�WR�FRYHUHG�ERQGV�UDWLQJV��ZKLFK�LQFRUSRUDWH�ERWK�DQ�LQGLFDWLRQ�RI�WKH�SUREDELOLW\�RI�GHIDXOW�DQG�RI�WKH�UHFRYHU\�JLYHQ�D�GHIDXOW�RI�WKLV�GHEW�LQVWUXPHQW���7KH�UHODWLRQVKLS�EHWZHHQ�LVVXHU�VFDOH�DQG�REOLJDWLRQ�VFDOH�DVVXPHV�DQ�KLVWRULFDO�DYHUDJH�UHFRYHU\�RI�EHWZHHQ��������� RQ� WKH� VHQLRU�� XQVHFXUHG� REOLJDWLRQV� RI� DQ� LVVXHU�� $V� D� UHVXOW�� LQGLYLGXDO� REOLJDWLRQV� RI� HQWLWLHV�� VXFK� DV�FRUSRUDWLRQV��DUH�DVVLJQHG�UDWLQJV�KLJKHU��ORZHU��RU�WKH�VDPH�DV�WKDW�HQWLW\¶V�LVVXHU�UDWLQJ�RU�,'5��$W�WKH�ORZHU�HQG�RI�WKH� UDWLQJV� VFDOH�� )LWFK�5DWLQJV� QRZ�DGGLWLRQDOO\� SXEOLVKHV� H[SOLFLW�5HFRYHU\�5DWLQJV� LQ�PDQ\� FDVHV� WR� FRPSOHPHQW�LVVXHU�DQG�REOLJDWLRQ�UDWLQJV���AAA: Highest credit quality. µ$$$¶� UDWLQJV� GHQRWH� WKH� ORZHVW� H[SHFWDWLRQ� RI� FUHGLW� ULVN�� 7KH\� DUH� DVVLJQHG� RQO\� LQ� FDVHV� RI� H[FHSWLRQDOO\� VWURQJ�FDSDFLW\�IRU�SD\PHQW�RI�ILQDQFLDO�FRPPLWPHQWV��7KLV�FDSDFLW\�LV�KLJKO\�XQOLNHO\�WR�EH�DGYHUVHO\�DIIHFWHG�E\�IRUHVHHDEOH�HYHQWV���AA: Very high credit quality. µ$$¶� UDWLQJV� GHQRWH� H[SHFWDWLRQV� RI� YHU\� ORZ� FUHGLW� ULVN�� 7KH\� LQGLFDWH� YHU\� VWURQJ� FDSDFLW\� IRU� SD\PHQW� RI� ILQDQFLDO�FRPPLWPHQWV��7KLV�FDSDFLW\�LV�QRW�VLJQLILFDQWO\�YXOQHUDEOH�WR�IRUHVHHDEOH�HYHQWV���A: High credit quality. µ$¶�UDWLQJV�GHQRWH�H[SHFWDWLRQV�RI� ORZ�FUHGLW�ULVN��7KH�FDSDFLW\�IRU�SD\PHQW�RI�ILQDQFLDO�FRPPLWPHQWV�LV�FRQVLGHUHG�VWURQJ��7KLV�FDSDFLW\�PD\��QHYHUWKHOHVV��EH�PRUH�YXOQHUDEOH�WR�DGYHUVH�EXVLQHVV�RU�HFRQRPLF�FRQGLWLRQV�WKDQ�LV�WKH�FDVH�IRU�KLJKHU�UDWLQJV���BBB: Good credit quality. µ%%%¶� UDWLQJV� LQGLFDWH� WKDW� H[SHFWDWLRQV� RI� FUHGLW� ULVN� DUH� FXUUHQWO\� ORZ�� 7KH� FDSDFLW\� IRU� SD\PHQW� RI� ILQDQFLDO�FRPPLWPHQWV� LV� FRQVLGHUHG� DGHTXDWH� EXW� DGYHUVH� EXVLQHVV� RU� HFRQRPLF� FRQGLWLRQV� DUH� PRUH� OLNHO\� WR� LPSDLU� WKLV�FDSDFLW\���BB: Speculative. µ%%¶� UDWLQJV� LQGLFDWH�DQ�H OHYDWHG�YXOQHUDELOLW\� WR�FUHGLW� ULVN��SDUWLFXODUO\� LQ� WKH�HYHQW�RI�DGYHUVH�FKDQJHV� LQ�EXVLQHVV�RU�HFRQRPLF� FRQGLWLRQV� RYHU� WLPH�� KRZHYHU�� EXVLQHVV� RU� ILQDQFLDO� DOWHUQDWLYHV� PD\� EH� DYDLODEOH� WR� DOORZ� ILQDQFLDO�FRPPLWPHQWV�WR�EH�PHW�� B: Highly speculative. µ%¶�UDWLQJV�LQGLFDWH�WKDW�PDWHULDO�FUHGLW�ULVN�LV�SUHVHQW���� CCC: Substantial credit risk. µ&&&¶�UDWLQJV�LQGLFDWH�WKDW�VXEVWDQWLDO�FUHGLW�ULVN�LV�SUHVHQW�����CC: Very high levels of credit risk. µ&&¶�UDWLQJV�LQGLFDWH�YHU\�KLJK�OHYHOV�RI�FUHGLW�ULVN�����C: Exceptionally high levels of credit risk. µ&¶�LQGLFDWHV�H[FHSWLRQDOO\�KLJK�OHYHOV�RI�FUHGLW�ULVN�����

Page 13: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

'HIDXOWHG� REOLJDWLRQV� W\SLFDOO\� DUH� QRW� DVVLJQHG� µ5'¶� RU� µ'¶� UDWLQJV�� EXW� DUH� LQVWHDG� UDWHG� LQ� WKH� µ%¶� WR� µ&¶� UDWLQJ�FDWHJRULHV�� GHSHQGLQJ� XSRQ� WKHLU� UHFRYHU\� SURVSHFWV� DQG�RW KHU� UHOHYDQW� FKDUDFWHULVWLFV�� 7KLV� DSSURDFK�EHWWHU� DOLJQV�REOLJDWLRQV�WKDW�KDYH�FRPSDUDEOH�RYHUDOO�H[SHFWHG�ORVV�EXW�YDU\LQJ�YXOQHUDELOLW\�WR�GHIDXOW�DQG�ORVV�� Note: The modifiers “+” or “-” may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the ‘AAA’ obligation rating category, or to corporate finance obligation ratings in the categories below ‘CCC’. The subscript ‘emr’ is appended to a rating to denote embedded market risk which is beyond the scope of the rating. The designation is intended to make clear that the rating solely addresses the counterparty risk of the issuing bank. It is not meant to indicate any limitation in the analysis of the counterparty risk, which in all other respects follows published Fitch criteria for analyzing the issuing financial institution. Fitch does not rate these instruments where the principal is to any degree subject to market risk. �† Table of the Relationship between Performing and Non-performing Corporate Obligations in Low Speculative Grade (Recovery Ratings are discussed in section A.2) �

Obligation Rating Performing Obligation Non-performing Obligation

%�&DWHJRU\��

'HIDXOW�ULVN�LV�FRPPHQVXUDWH�ZLWK�DQ�,'5�LQ�WKH�UDQJHV�µ%%¶�WR�µ&¶���)RU�LVVXHUV�ZLWK�DQ�,'5�EHORZ�µ%¶��WKH�RYHUDOO�FUHGLW�ULVN�RI�WKLV�REOLJDWLRQ�LV�PRGHUDWHG�E\�WKH�H[SHFWHG�OHYHO�RI�UHFRYHULHV�VKRXOG�D�GHIDXOW�RFFXU���)RU�LVVXHUV�ZLWK�DQ�,'5�DERYH�µ%¶��WKH�RYHUDOO�FUHGLW�ULVN�RI�WKLV�REOLJDWLRQ�LV�H[DFHUEDWHG�E\�WKH�H[SHFWHG�ORZ�OHYHO�RI�UHFRYHULHV�VKRXOG�D�GHIDXOW�RFFXU��

7KH�REOLJDWLRQ�RU�LVVXHU�LV�LQ�GHIDXOW��RU�KDV�GHIHUUHG�SD\PHQW��EXW�WKH�UDWHG�REOLJDWLRQ�LV�H[SHFWHG�WR�KDYH�H[WUHPHO\�KLJK�UHFRYHU\�UDWHV�FRQVLVWHQW�ZLWK�D�5HFRYHU\�5DWLQJ�RI�µ55�¶�

&&&�&DWHJRU\��

'HIDXOW�ULVN�LV�FRPPHQVXUDWH�ZLWK�DQ�,'5�LQ�WKH�UDQJHV�µ%¶�WR�µ&¶���)RU�LVVXHUV�ZLWK�DQ�,'5�EHORZ�µ&&&¶��WKH�RYHUDOO�FUHGLW�ULVN�RI�WKLV�REOLJDWLRQ�LV�PRGHUDWHG�E\�WKH�H[SHFWHG�OHYHO�RI�UHFRYHULHV�VKRXOG�D�GHIDXOW�RFFXU���)RU�LVVXHUV�ZLWK�DQ�,'5�DERYH�µ&&&¶��WKH�RYHUDOO�FUHGLW�ULVN�RI�WKLV�REOLJDWLRQ�LV�H[DFHUEDWHG�E\�WKH�H[SHFWHG�ORZ�OHYHO�RI�UHFRYHULHV�VKRXOG�D�GHIDXOW�RFFXU��

7KH�REOLJDWLRQ�RU�LVVXHU�LV�LQ�GHIDXOW��RU�KDV�GHIHUUHG�SD\PHQW��EXW�WKH�UDWHG�REOLJDWLRQ�LV�H[SHFWHG�WR�KDYH�D�VXSHULRU�UHFRYHU\�UDWH�FRQVLVWHQW�ZLWK�D�5HFRYHU\�5DWLQJ�RI�µ55�¶��

&&�&DWHJRU\��

'HIDXOW�ULVN�LV�FRPPHQVXUDWH�ZLWK�DQ�,'5�LQ�WKH�UDQJHV�µ%¶�WR�µ&¶���)RU�LVVXHUV�ZLWK�DQ�,'5�EHORZ�µ&&¶��WKH�RYHUDOO�FUHGLW�ULVN�RI�WKLV�REOLJDWLRQ�LV�PRGHUDWHG�E\�WKH�H[SHFWHG�OHYHO�RI�UHFRYHULHV�VKRXOG�D�GHIDXOW�RFFXU���)RU�LVVXHUV�ZLWK�DQ�,'5�DERYH�µ&&¶��WKH�RYHUDOO�FUHGLW�ULVN�RI�WKLV�REOLJDWLRQ�LV�H[DFHUEDWHG�E\�WKH�H[SHFWHG�ORZ�OHYHO�RI�UHFRYHULHV�VKRXOG�D�GHIDXOW�RFFXU��

7KH�REOLJDWLRQ�RU�LVVXHU�LV�LQ�GHIDXOW��RU�KDV�GHIHUUHG�SD\PHQW��EXW�WKH�UDWHG�REOLJDWLRQ�LV�H[SHFWHG�WR�KDYH�D�JRRG�UHFRYHU\�UDWH�FRQVLVWHQW�ZLWK�D�5HFRYHU\�5DWLQJ�RI�µ55�¶��

&�&DWHJRU\��

'HIDXOW�ULVN�LV�FRPPHQVXUDWH�ZLWK�DQ�,'5�LQ�WKH�UDQJHV�µ%¶�WR�µ&¶���7KH�RYHUDOO�FUHGLW�ULVN�RI�WKLV�REOLJDWLRQ�LV�H[DFHUEDWHG�E\�WKH�H[SHFWHG�ORZ�OHYHO�RI�UHFRYHULHV�VKRXOG�D�GHIDXOW�RFFXU��

7KH�REOLJDWLRQ�RU�LVVXHU�LV�LQ�GHIDXOW��RU�KDV�GHIHUUHG�SD\PHQW��DQG�WKH�UDWHG�REOLJDWLRQ�LV�H[SHFWHG�WR�KDYH�DQ�DYHUDJH��EHORZ�DYHUDJH�RU�SRRU�UHFRYHU\�UDWH�FRQVLVWHQW�ZLWK�D�5HFRYHU\�5DWLQJ�RI�µ55�¶��µ55�¶�RU�µ55�¶��

Page 14: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

/LPLWDWLRQV�RI�WKH�&RUSRUDWH�)LQDQFH�2EOLJDWLRQ�5DWLQJ�6FDOH�6SHFLILF�OLPLWDWLRQV�UHOHYDQW�WR�WKH�FRUSRUDWH�REOLJDWLRQ�UDWLQJ�VFDOH�LQFOXGH��y� 7KH�UDWLQJV�GR�QRW�SUHGLFW�D�VSHFLILF�SHUFHQWDJH�RI�GHIDXOW�OLNHOLKRRG�RU�H[SHFWHG�ORVV�RYHU�DQ\�JLYHQ�WLPH�SHULRG��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�PDUNHW�YDOXH�RI�DQ\�LVVXHU¶V�VHFXULWLHV�RU�VWRFN��RU�WKH�OLNHOLKRRG�WKDW�WKLV�YDOXH�PD\�

FKDQJH��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�OLTXLGLW\�RI�WKH�LVVXHU¶V�VHFXULWLHV�RU�VWRFN��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�VXLWDELOLW\�RI�DQ�LVVXHU�DV�D�FRXQWHUSDUW\�WR�WUDGH�FUHGLW��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�DQ\�TXDOLW\�UHODWHG�WR�DQ�LVVXHU¶V�EXVLQHVV��RSHUDWLRQDO�RU�ILQDQFLDO�SURILOH�RWKHU�WKDQ�WKH�

DJHQF\¶V�RSLQLRQ�RQ�LWV�UHODWLYH�YXOQHUDELOLW\�WR�GHIDXOW�DQG�UHODWLYH�UHFRYHU\�VKRXOG�D�GHIDXOW�RFFXU���5HFRYHU\�5DWLQJV��LQ�SDUWLFXODU��UHIOHFW�D�IXQGDPHQWDO�DQDO\VLV�RI�WKH�XQGHUO\LQJ�UHODWLRQVKLS�EHWZHHQ�ILQDQFLDO�FODLPV�RQ�DQ�HQWLW\�RU�WUDQVDFWLRQ�DQG�SRWHQWLDO�VRXUFHV�WR�PHHW�WKRVH�FODLPV��7KH�VL]H�RI�VXFK�VRXUFHV�DQG�FODLPV�LV�VXEMHFW�WR�D�ZLGH�YDULHW\�RI�G\QDPLF�IDFWRUV�RXWVLGH�WKH�DJHQF\¶V�DQDO\VLV�ZKLFK�ZLOO�LQIOXHQFH�DFWXDO�UHFRYHU\�UDWHV���5DWLQJV�DVVLJQHG�E\�)LWFK�5DWLQJV�DUWLFXODWH�DQ� RSLQLRQ�RQ� GLVFUHWH�DQG�VSHFLILF�DUHDV�RI� ULVN��7KH�DERYH� OLVW� LV�QRW�H[KDXVWLYH��DQG�LV�SURYLGHG�IRU�WKH�UHDGHU¶V�FRQYHQLHQFH��5HDGHUV�DUH�UHTXHVWHG�WR�UHYLHZ�WKH�VHFWLRQ�Understanding Credit Ratings - Limitations and Usage�IRU�IXUWKHU�LQIRUPDWLRQ�RQ�WKH�OLPLWDWLRQV�RI�WKH�DJHQF\¶V�UDWLQJV���

Page 15: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$���������6WUXFWXUHG��3URMHFW��3XEOLF�)LQDQFH�2EOLJDWLRQV�±�/RQJ�7HUP�5DWLQJ�6FDOHV�5DWLQJV� RI� VWUXFWXUHG� ILQDQFH�� SURMHFW� ILQDQFH� DQG� SXEOLF� ILQDQFH� REOLJDWLRQV� RQ�W KH� ORQJ�WHUP� VFDOH�� LQFOXGLQJ� WKH�ILQDQFLDO�REOLJDWLRQV�RI�VRYHUHLJQV��FRQVLGHU�WKH�REOLJDWLRQV¶�UHODWLYH�YXOQHUDELOLW\�WR�GHIDXOW��7KHVH�UDWLQJV�DUH�W\SLFDOO\�DVVLJQHG�WR�DQ�LQGLYLGXDO�VHFXULW\�RU�WUDQFKH�LQ�D�WUDQVDFWLRQ�DQG�QRW�WR�DQ�LVVXHU����AAA: Highest credit quality. µ$$$¶� UDWLQJV�GHQRWH� WKH� ORZHVW�H[SHFWDWLRQ�RI�GHIDXOW� ULVN��7KH\�DUH�DVVLJQHG�RQO\� LQ� FDVHV�RI�H[FHSWLRQDOO\� VWURQJ�FDSDFLW\�IRU�SD\PHQW�RI�ILQDQFLDO�FRPPLWPHQWV��7KLV�FDSDFLW\�LV�KLJKO\�XQOLNHO\�WR�EH�DGYHUVHO\�DIIHFWHG�E\�IRUHVHHDEOH�HYHQWV���AA: Very high credit quality. µ$$¶� UDWLQJV�GHQRWH�H[SHFWDWLRQV�RI�YHU\� ORZ�GHIDXOW� ULVN��7KH\� LQGLFDWH�YHU\�VWURQJ�FDSDFLW\� IRU�SD\PHQW�RI� ILQDQFLDO�FRPPLWPHQWV��7KLV�FDSDFLW\�LV�QRW�VLJQLILFDQWO\�YXOQHUDEOH�WR�IRUHVHHDEOH�HYHQWV���A: High credit quality. µ$¶�UDWLQJV�GHQRWH�H[SHFWDWLRQV�RI�ORZ�GHIDXOW�ULVN��7KH�FDSDFLW\�IRU�SD\PHQW�RI�ILQDQFLDO�FRPPLWPHQWV�LV�FRQVLGHUHG�VWURQJ��7KLV�FDSDFLW\�PD\��QHYHUWKHOHVV��EH�PRUH�YXOQHUDEOH�WR�DGYHUVH�EXVLQHVV�RU�HFRQRPLF�FRQGLWLRQV�WKDQ�LV�WKH�FDVH�IRU�KLJKHU�UDWLQJV���BBB: Good credit quality. µ%%%¶� UDWLQJV� LQGLFDWH� WKDW� H[SHFWDWLRQV� RI� GHIDXOW� ULVN� DUH� FXUUHQWO\� ORZ�� 7KH� FDSDFLW\� IRU� SD\PHQW� RI� ILQDQFLDO�FRPPLWPHQWV� LV� FRQVLGHUHG� DGHTXDWH� EXW� DGYHUVH� EXVLQHVV� RU� HFRQRPLF� FRQGLWLRQV� DUH� PRUH� OLNHO\� WR� LPSDLU� WKLV�FDSDFLW\���BB: Speculative. µ%%¶�UDWLQJV�LQGLFDWH�DQ�HOHYDWHG�YXOQHUDELOLW\�WR�GHIDXOW�ULVN��SDUWLFXODUO\�LQ�WKH�HYHQW�RI�DGYHUVH�FKDQJHV�LQ�EXVLQHVV�RU�HFRQRPLF�FRQGLWLRQV�RYHU�WLPH���B: Highly speculative. µ%¶�UDWLQJV�LQGLFDWH�WKDW�PDWHULDO�GHIDXOW�ULVN�LV�SUHVHQW��EXW�D�OLPLWHG�PDUJLQ�RI�VDIHW\�UHPDLQV��)LQDQFLDO�FRPPLWPHQWV�DUH� FXUUHQWO\� EHLQJ�PHW�� KRZHYHU�� FDSDFLW\� IRU� FRQWLQXHG�SD\PHQW� LV� YXOQHUDEOH� WR�GHWHULRUDWLRQ� LQ� WKH�EXVLQHVV�DQG�HFRQRPLF�HQYLURQPHQW���CCC: Substantial credit risk. 'HIDXOW�LV�D�UHDO�SRVVLELOLW\����CC: Very high levels of credit risk. 'HIDXOW�RI�VRPH�NLQG�DSSHDUV�SUREDEOH���C: Exceptionally high levels of credit risk. 'HIDXOW�DSSHDUV�LPPLQHQW�RU�LQHYLWDEOH���D: Default. ,QGLFDWHV�D�GHIDXOW��'HIDXOW�JHQHUDOO\�LV�GHILQHG�DV�RQH�RI�WKH�IROORZLQJ���y� IDLOXUH�WR�PDNH�SD\PHQW�RI�SULQFLSDO�DQG�RU�LQWHUHVW�XQGHU�WKH�FRQWUDFWXDO�WHUPV�RI�WKH�UDWHG�REOLJDWLRQ���y� WKH�EDQNUXSWF\�ILOLQJV��DGPLQLVWUDWLRQ��UHFHLYHUVKLS��OLTXLGDWLRQ�RU�RWKHU�ZLQGLQJ�XS�RU�FHVVDWLRQ�RI�WKH�EXVLQHVV�RI�DQ�

LVVXHU�REOLJRU��RU��y� WKH�GLVWUHVVHG�H[FKDQJH�RI�DQ�REOLJDWLRQ��ZKHUH�FUHGLWRUV�ZHUH�RIIHUHG�VHFXULWLHV�ZLWK�GLPLQLVKHG�VWUXFWXUDO�RU�

HFRQRPLF�WHUPV�FRPSDUHG�ZLWK�WKH�H[LVWLQJ�REOLJDWLRQ�WR�DYRLG�D�SUREDEOH�SD\PHQW�GHIDXOW��

Page 16: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

�Structured Finance Defaults ³,PPLQHQW´�GHIDXOW��FDWHJRUL]HG�XQGHU�µ&¶��W\SLFDOO\�UHIHUV�WR�WKH�RFFDVLRQ�ZKHUH�D�SD\PHQW�GHIDXOW�KDV�EHHQ�LQWLPDWHG�E\�WKH�LVVXHU��DQG�LV�DOO�EXW�LQHYLWDEOH��$OWHUQDWLYHO\�ZKHUH�DQ�LVVXHU�KDV�IRUPDOO\�DQQRXQFHG�D�GLVWUHVVHG�GHEW�H[FKDQJH��EXW�WKH�GDWH�RI�WKH�H[FKDQJH�VWLOO�OLHV�VHYHUDO�GD\V�RU�ZHHNV�LQ�WKH�LPPHGLDWH�IXWXUH���$GGLWLRQDOO\��LQ�VWUXFWXUHG�ILQDQFH�WUDQVDFWLRQV��ZKHUH�DQDO\VLV�LQGLFDWHV�WKDW�DQ�LQVWUXPHQW�LV�LUUHYRFDEO\�LPSDLUHG�VXFK�WKDW� LW� LV� QRW� H[SHFWHG� WR� SD\� LQWHUHVW� DQG�RU� SULQFLSDO� LQ� IXOO� LQ� DFFRUGDQFH� ZLWK� WKH� WHUPV� RI� WKH� REOLJDWLRQ¶V�GRFXPHQWDWLRQ�GXULQJ� WKH� OLIH�RI� WKH� WUDQVDFWLRQ��EXW�ZKHUH� QR�SD\PHQW�GHIDXOW� LQ� DFFRUGDQFH�ZLWK� WKH� WHUPV�RI� WKH�GRFXPHQWDWLRQ�LV�LPPLQHQW��WKH�REOLJDWLRQ�ZLOO�W\SLFDOO\�EH�UDWHG�LQ�WKH�µ&¶�FDWHJRU\����Structured Finance Write-downs :KHUH�DQ�LQVWUXPHQW�KDV�H[SHULHQFHG�DQ�LQYROXQWDU\�DQG��LQ�WKH�DJHQF\¶V�RSLQLRQ��LUUHYHUVLEOH�³ZULWH�GRZQ´�RI�SULQFLSDO��L�H��RWKHU�WKDQ�WKURXJK�DPRUWL]DWLRQ��DQG�UHVXOWLQJ�LQ�D�ORVV�WR�WKH�LQYHVWRU���D�FUHGLW�UDWLQJ�RI�µ'¶�ZLOO�EH�DVVLJQHG�WR�WKH�LQVWUXPHQW��:KHUH�WKH�DJHQF\�EHOLHYHV�WKH�³ZULWH�GRZQ´�PD\�SURYH�WR�EH�WHPSRUDU\��DQG�WKH�ORVV�PD\�EH�³ZULWWHQ�XS´�DJDLQ� LQ� IXWXUH� LI� DQG�ZKHQ�SHUIRUPDQFH� LPSURYHV��� WKHQ� D� FUHGLW� UDWLQJ� RI� µ&¶�ZLOO� W\SLFDOO\� EH�DV VLJQHG��6KRXOG� WKH�³ZULWH�GRZQ´�WKHQ�ODWHU�EH�UHYHUVHG��WKH�FUHGLW�UDWLQJ�ZLOO�EH�UDLVHG�WR�DQ�DSSURSULDWH�OHYHO�IRU�WKDW�LQVWUXPHQW��6KRXOG�WKH�³ZULWH�GRZQ´�ODWHU�EH�GHHPHG�DV�LUUHYHUVLEOH��WKH�FUHGLW�UDWLQJ�ZLOO�EH�ORZHUHG�WR�µ'¶������Notes: In the case of structured and project finance, while the ratings do not address the loss severity given default of the rated liability, loss severity assumptions on the underlying assets are nonetheless typically included as part of the analysis. Loss severity assumptions are used to derive pool cash flows available to service the rated liability. The suffix ‘sf’’ denotes an issue that is a structured finance transaction. For an explanation of how Fitch determines structured finance ratings, please see our criteria available at www.Fitchratings.com. In the case of public finance, the ratings do not address the loss given default of the rated liability, focusing instead on the vulnerability to default of the rated liability. The modifiers “+” or “-” may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the ‘AAA’ Long-Term Rating category, or categories below ‘B’. Enhanced Equipment Trust Certificates (EETCs) are corporate-structured hybrid debt securities that airlines typically use to finance aircraft equipment. Due to the hybrid characteristics of these bonds, Fitch’s rating approach incorporates elements of both the structured finance and corporate rating methodologies. Although rated as asset-backed securities, unlike other structured finance ratings, EETC ratings involve a measure of recovery given default akin to ratings of financial obligations in corporate finance, as described in paragraph A.1.1.2.

/LPLWDWLRQV�RI�WKH�6WUXFWXUHG��3URMHFW�DQG�3XEOLF�)LQDQFH�2EOLJDWLRQ�5DWLQJ�6FDOH�6SHFLILF�OLPLWDWLRQV�UHOHYDQW�WR�WKH�VWUXFWXUHG��SURMHFW�DQG�SXEOLF�ILQDQFH�REOLJDWLRQ�UDWLQJ�VFDOH�LQFOXGH��y� 7KH�UDWLQJV�GR�QRW�SUHGLFW�D�VSHFLILF�SHUFHQWDJH�RI�GHIDXOW�OLNHOLKRRG�RYHU�DQ\�JLYHQ�WLPH�SHULRG��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�PDUNHW�YDOXH�RI�DQ\�LVVXHU¶V�VHFXULWLHV�RU�VWRFN��RU�WKH�OLNHOLKRRG�WKDW�WKLV�YDOXH�PD\�

FKDQJH��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�OLTXLGLW\�RI�WKH�LVVXHU¶V�VHFXULWLHV�RU�VWRFN��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�SRVVLEOH�ORVV�VHYHULW\�RQ�DQ�REOLJDWLRQ�VKRXOG�DQ�REOLJDWLRQ�GHIDXOW��

Page 17: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

y� 7KH� UDWLQJV� GR�QRW � RSLQH� RQ� DQ\� TXDOLW\� UHODWHG� WR� D� WUDQVDFWLRQ¶V� SURILOH� RWKHU� WKDQ� WKH� DJHQF\¶V� RSLQLRQ� RQ�W KH�UHODWLYH�YXOQHUDELOLW\�WR�GHIDXOW�RI�HDFK�UDWHG�WUDQFKH�RU�VHFXULW\��

�5DWLQJV�DVVLJQHG�E\�)LWFK�5DWLQJV�DUWLFXODWH�DQ� RSLQLRQ�RQ� GLVFUHWH�DQG�VSHFLILF�DUHDV�RI� ULVN��7KH�DERYH� OLVW� LV�QRW�H[KDXVWLYH��DQG�LV�SURYLGHG�IRU�WKH�UHDGHU¶V�FRQYHQLHQFH��5HDGHUV�DUH�UHTXHVWHG�WR�UHYLHZ�WKH�VHFWLRQ�Understanding Credit Ratings - Limitations and Usage�IRU�IXUWKHU�LQIRUPDWLRQ�RQ�WKH�OLPLWDWLRQV�RI�WKH�DJHQF\¶V�UDWLQJV���

Page 18: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$����� 6KRUW�7HUP�5DWLQJV�$�������6KRUW�7HUP�5DWLQJV�$VVLJQHG�WR�,VVXHUV�RU�2EOLJDWLRQV�LQ�&RUSRUDWH��3XEOLF�DQG�6WUXFWXUHG�)LQDQFH�$�VKRUW�WHUP�LVVXHU�RU�REOLJDWLRQ�UDWLQJ�LV�EDVHG�LQ�DOO�FDVHV�RQ�WKH�VKRUW�WHUP�YXOQHUDELOLW\�WR�GHIDXOW�RI�WKH�UDWHG�HQWLW\�RU� VHFXULW\� VWUHDP� DQG� UHODWHV� WR� WKH� FDSDFLW\� WR� PHHW� ILQDQFLDO� REOLJDWLRQV� LQ� DFFRUGDQFH� ZLWK� WKH� GRFXPHQWDWLRQ�JRYHUQLQJ� WKH�UHOHYDQW�REOLJDWLRQ��6KRUW�7HUP�5DWLQJV�DUH�DVVLJQHG� WR�REOLJDWLRQV�ZKRVH� LQLWLDO�PDWXULW\� LV�YLHZHG�DV�³VKRUW� WHUP´� EDVHG� RQ�P DUNHW� FRQYHQWLRQ�� 7\SLFDOO\�� WKLV� PHDQV� XS�W R� ��� PRQWKV� IRU� FRUSRUDWH�� VRYHUHLJQ�� DQG�VWUXFWXUHG�REOLJDWLRQV��DQG�XS�WR����PRQWKV�IRU�REOLJDWLRQV�LQ�8�6��SXEOLF�ILQDQFH�PDUNHWV����F1: Highest short-term credit quality. ,QGLFDWHV� WKH� VWURQJHVW� LQWULQVLF� FDSDFLW\� IRU� WLPHO\� SD\PHQW� RI� ILQDQFLDO� FRPPLWPHQWV�� PD\� KDYH� DQ� DGGHG� ³�´� WR�GHQRWH�DQ\�H[FHSWLRQDOO\�VWURQJ�FUHGLW�IHDWXUH���F2: Good short-term credit quality. *RRG�LQWULQVLF�FDSDFLW\�IRU�WLPHO\�SD\PHQW�RI�ILQDQFLDO�FRPPLWPHQWV���F3: Fair short-term credit quality. 7KH�LQWULQVLF�FDSDFLW\�IRU�WLPHO\�SD\PHQW�RI�ILQDQFLDO�FRPPLWPHQWV�LV�DGHTXDWH���B: Speculative short-term credit quality. 0LQLPDO� FDSDFLW\� IRU� WLPHO\� SD\PHQW� RI� ILQDQFLDO� FRPPLWPHQWV�� SOXV� KHLJKWHQHG� YXOQHUDELOLW\� WR� QHDU� WHUP� DGYHUVH�FKDQJHV�LQ�ILQDQFLDO�DQG�HFRQRPLF�FRQGLWLRQV���C: High short-term default risk. 'HIDXOW�LV�D�UHDO�SRVVLELOLW\����RD: Restricted default. ,QGLFDWHV�DQ�HQWLW\�WKDW�KDV�GHIDXOWHG�RQ�RQH�RU�PRUH�RI�LWV�ILQDQFLDO�FRPPLWPHQWV��DOWKRXJK�LW�FRQWLQXHV�WR�PHHW�RWKHU�ILQDQFLDO�REOLJDWLRQV��7\SLFDOO\�DSSOLFDEOH�WR�HQWLW\�UDWLQJV�RQO\��D: Default. ,QGLFDWHV�D�EURDG�EDVHG�GHIDXOW�HYHQW�IRU�DQ�HQWLW\��RU�WKH�GHIDXOW�RI�D�VKRUW�WHUP�REOLJDWLRQ���

/LPLWDWLRQV�RI�WKH�6KRUW�7HUP�5DWLQJV�6FDOH�6SHFLILF�OLPLWDWLRQV�UHOHYDQW�WR�WKH�6KRUW�7HUP�5DWLQJV�VFDOH�LQFOXGH��y� 7KH�UDWLQJV�GR�QRW�SUHGLFW�D�VSHFLILF�SHUFHQWDJH�RI�GHIDXOW�OLNHOLKRRG�RYHU�DQ\�JLYHQ�WLPH�SHULRG��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�PDUNHW�YDOXH�RI�DQ\�LVVXHU¶V�VHFXULWLHV�RU�VWRFN��RU�WKH�OLNHOLKRRG�WKDW�WKLV�YDOXH�PD\�FKDQJH��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�OLTXLGLW\�RI�WKH�LVVXHU¶V�VHFXULWLHV�RU�VWRFN��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�SRVVLEOH�ORVV�VHYHULW\�RQ�DQ�REOLJDWLRQ�VKRXOG�DQ�REOLJDWLRQ�GHIDXOW��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�DQ\�TXDOLW\�UHODWHG�WR�DQ�LVVXHU�RU�WUDQVDFWLRQ¶V�SURILOH�RWKHU�WKDQ�WKH�DJHQF\¶V�RSLQLRQ�RQ�WKH�UHODWLYH�

YXOQHUDELOLW\�WR�GHIDXOW�RI�WKH�UDWHG�LVVXHU�RU�REOLJDWLRQ���5DWLQJV�DVVLJQHG�E\�)LWFK�5DWLQJV�DUWLFXODWH�DQ�RSLQLRQ�RQ�GLVFUHWH�DQG�VSHFLILF�DUHDV�RI�ULVN��7KH�DERYH�OLVW�LV�QRW�H[KDXVWLYH��DQG�LV�SURYLGHG�IRU�WKH�UHDGHU¶V�FRQYHQLHQFH��5HDGHUV�DUH�UHTXHVWHG�WR�UHYLHZ�WKH�VHFWLRQ�Understanding Credit Ratings - Limitations and Usage�IRU�IXUWKHU�LQIRUPDWLRQ�RQ�WKH�OLPLWDWLRQV�RI�WKH�DJHQF\¶V�UDWLQJV���

Page 19: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$�������5HODWLRQVKLS�EHWZHHQ�6KRUW�7HUP�DQG�/RQJ�7HUP�5DWLQJV�LQ�&RUSRUDWH�DQG�3XEOLF�)LQDQFH�)RU� WKH� DJHQF\¶V� FRUSRUDWH� DQG� SXEOLF� ILQDQFH� UDWLQJV�� LVVXHUV� PD\� RIWHQ� FDUU\� ERWK� /RQJ�7HUP� DQG�6 KRUW�7HUP�5DWLQJV��7KHVH�PD\�EH�DVVLJQHG�WR�WKH�LVVXHU��WR�LWV�REOLJDWLRQV��RU�WR�ERWK��:KLOH�WKHUH�DUH�D�ODUJH�QXPEHU�RI�GLVFUHWH�IDFWRUV�WKDW�GULYH�6KRUW�7HUP�5DWLQJV��D� OLQNDJH�KDV�W\SLFDOO\�H[LVWHG�EHWZHHQ�6KRUW�7HUP�DQG�/RQJ�7HUP�5DWLQJV��,Q�SDUW�� WKLV�UHIOHFWV�WKH�LQKHUHQW� LPSRUWDQFH�RI� OLTXLGLW\�DQG�QHDU�WHUP�FRQFHUQV�ZLWKLQ�WKH�DVVHVVPHQW�RI�WKH�ORQJHU�WHUP�FUHGLW�SURILOH��$GGLWLRQDOO\��LW�HQVXUHV�WKDW�WKH�WZR�VFDOHV�GR�QRW�LQWXLWLYHO\�FRQWUDGLFW�HDFK�RWKHU�IRU�D�JLYHQ�LVVXHU��7KLV�OLQNDJH�LV�RXWOLQHG�EHORZ��DQG�LQ�PRVW�FLUFXPVWDQFHV�GLVSOD\V�D�FHUWDLQ�DV\PPHWU\��QDPHO\���

D���KLJKHU� UHODWLYH� VKRUW�WHUP� GHIDXOW� ULVN� LPSOLHV� DQ�HO HYDWHG� ULVN� RI� GHIDXOW� LQ� WKH� QHDU�WHUP� ZKLFK� FDQQRW� EH�VHSDUDWHG�IURP�WKH�ORQJ�WHUP�GHIDXOW�DVVHVVPHQW�IRU�PRVW�LQVWUXPHQWV�DQG�LVVXHUV��EXW�

E���ORZHU� UHODWLYH� VKRUW�WHUP�GHIDXOW� ULVN�� SHUKDSV� WKURXJK� IDFWRUV� WKDW� OHQG� WKH� LVVXHU¶V�SURILOH� WHPSRUDU\� VXSSRUW��PD\�FRH[LVW�ZLWK�KLJKHU�PHGLXP��RU�ORQJHU�WHUP�GHIDXOW�ULVN��

�7KH�5DWLQJ�&RUUHVSRQGHQFH�7DEOH�WKXV�UHSUHVHQWV�D�³FRPPRQ�VHQVH´�FKHFN�RQ�WKH�FRPELQDWLRQ�RI�D�SDUWLFXODUO\�ZHDN�6KRUW�7HUP�5DWLQJ�ZLWK�D�KLJK�/RQJ�7HUP�5DWLQJ��7KH�RWKHU�DV\PPHWU\�±�VWURQJHU�6KRUW�7HUP�5DWLQJ�EXW�ZHDNHU�/RQJ�7HUP�5DWLQJ�±� LV�DGGUHVVHG�FRQFHSWXDOO\��7KH�6KRUW�7HUP�5DWLQJ�ZLWKLQ� LQYHVWPHQW�JUDGH� LV�D�PHDVXUH�RI� LQWULQVLF�RU�VXVWDLQDEOH�OLTXLGLW\��ZKLFK�LQ�PRVW�FDVHV�H[FOXGHV�WKH�NLQG�RI�WHPSRUDU\�RU�XQVXVWDLQDEOH�VXSSRUW�GHVFULEHG�LQ�SRLQW�E��DERYH����,Q�FRQWUDVW��IRU�VSHFXODWLYH�JUDGH�UDWLQJV��JUHDWHU�HPSKDVLV�LV�JHQHUDOO\�SODFHG�RQ�WKH�DFWXDO�H[SHFWHG�OLTXLGLW\�SURILOH�RI�WKH�LVVXHU�RYHU�WKH����PRQWKV�WKDW�IROORZ��LQFOXGLQJ�WKH�LPSDFW�RI�WHPSRUDU\�LPSURYHPHQW�RU�GHFOLQHV�LQ�OLTXLGLW\���7KH� WDEOH� EHORZ� LV� D�JX LGH� RQO\�� DQG� YDULDWLRQV� IURP� WKLV� FRUUHVSRQGHQFH� ZLOO� RFFXU�� FRQVLVWHQW� ZLWK� WKH� FULWHULD�HPSOR\HG�E\�LQGLYLGXDO�UDWLQJ�JURXSV��ZKHUH�DQDO\WLFDOO\�PHULWHG���)RU�PRUH�GHWDLOV��SOHDVH�FRQVXOW��³Short-Term Ratings Criteria for Corporate Finance´�DQG�³Rating Municipal Short-term Debt´�����������������������

Page 20: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

5DWLQJ�&RUUHVSRQGHQFH�7DEOH�Long-Term Rating Short-Term Rating

$$$� )���$$�� )���$$� )���$$�� )���$�� )��RU�)���$� )��$�� )��RU�)��%%%�� )��%%%� )��RU�)��%%%�� )���%%�� %�%%� %�%%�� %�%�� %�%� %�%�� %�&&&� &�&&� &�&� &�5'�'� 5'�'�

Page 21: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$��� 5HFRYHU\�5DWLQJV�5HFRYHU\�5DWLQJV�DUH�DVVLJQHG�WR�VHOHFWHG�LQGLYLGXDO�VHFXULWLHV�DQG�REOLJDWLRQV��7KHVH�FXUUHQWO\�DUH�SXEOLVKHG�IRU�PRVW�LQGLYLGXDO�REOLJDWLRQV�RI�FRUSRUDWH�LVVXHUV�ZLWK�,'5V�LQ�WKH�µ%¶�UDWLQJ�FDWHJRU\�DQG�EHORZ���$PRQJ�WKH�IDFWRUV�WKDW�DIIHFW�UHFRYHU\�UDWHV�IRU�VHFXULWLHV�DUH�WKH�FROODWHUDO��WKH�VHQLRULW\�UHODWLYH�WR�RWKHU�REOLJDWLRQV�LQ�WKH�FDSLWDO�VWUXFWXUH��ZKHUH�DSSURSULDWH���DQG�WKH�H[SHFWHG�YDOXH�RI�WKH�FRPSDQ\�RU�XQGHUO\LQJ�FROODWHUDO�LQ�GLVWUHVV����7KH�5HFRYHU\� 5DWLQJ� VFDOH� LV� EDVHG� XSRQ� WKH� H[SHFWHG� UHODWLYH� UHFRYHU\� FKDUDFWHULVWLFV� RI� DQ�R EOLJDWLRQ� XSRQ� WKH�FXULQJ�RI�D�GHIDXOW��HPHUJHQFH�IURP�LQVROYHQF\�RU�IROORZLQJ�WKH�OLTXLGDWLRQ�RU�WHUPLQDWLRQ�RI�WKH�REOLJRU�RU�LWV�DVVRFLDWHG�FROODWHUDO�����5HFRYHU\�5DWLQJV�DUH�DQ�RUGLQDO�VFDOH�DQG�GR�QRW�DWWHPSW�WR�SUHFLVHO\�SUHGLFW�D�JLYHQ�OHYHO�RI�UHFRYHU\��$V�D�JXLGHOLQH�LQ�GHYHORSLQJ� WKH� UDWLQJ�DVVHVVPHQWV�� WKH�DJHQF\�HPSOR\V�EURDG� WKHRUHWLFDO� UHFRYHU\� EDQGV� LQ� LWV� UDWLQJV� DSSURDFK�EDVHG�RQ�KLVWRULFDO�DYHUDJHV��EXW�DFWXDO�UHFRYHULHV�IRU�D�JLYHQ�VHFXULW\�PD\�GHYLDWH�PDWHULDOO\�IURP�KLVWRULFDO�DYHUDJHV���RR1: Outstanding recovery prospects given default µ55�¶� UDWHG� VHFXULWLHV� KDYH� FKDUDFWHULVWLFV� FRQVLVWHQW� ZLWK� VHFXULWLHV� KLVWRULFDOO\� UHFRYHULQJ� ��������� RI� FXUUHQW�SULQFLSDO�DQG�UHODWHG�LQWHUHVW���RR2: Superior recovery prospects given default µ55�¶� UDWHG� VHFXULWLHV� KDYH� FKDUDFWHULVWLFV� FRQVLVWHQW� ZLWK� VHFXULWLHV� KLVWRULFDOO\� UHFRYHULQJ� �������� RI� FXUUHQW�SULQFLSDO�DQG�UHODWHG�LQWHUHVW���RR3: Good recovery prospects given default µ55�¶� UDWHG� VHFXULWLHV� KDYH� FKDUDFWHULVWLFV� FRQVLVWHQW� ZLWK� VHFXULWLHV� KLVWRULFDOO\� UHFRYHULQJ� �������� RI� FXUUHQW�SULQFLSDO�DQG�UHODWHG�LQWHUHVW���RR4: Average recovery prospects given default µ55�¶� UDWHG� VHFXULWLHV� KDYH� FKDUDFWHULVWLFV� FRQVLVWHQW� ZLWK� VHFXULWLHV� KLVWRULFDOO\� UHFRYHULQJ� �������� RI� FXUUHQW�SULQFLSDO�DQG�UHODWHG�LQWHUHVW���RR5: Below average recovery prospects given default µ55�¶� UDWHG� VHFXULWLHV� KDYH� FKDUDFWHULVWLFV� FRQVLVWHQW� ZLWK� VHFXULWLHV� KLVWRULFDOO\� UHFRYHULQJ� �������� RI� FXUUHQW�SULQFLSDO�DQG�UHODWHG�LQWHUHVW���RR6: Poor recovery prospects given default µ55�¶�UDWHG�VHFXULWLHV�KDYH�FKDUDFWHULVWLFV�FRQVLVWHQW�ZLWK�VHFXULWLHV�KLVWRULFDOO\�UHFRYHULQJ��������RI�FXUUHQW�SULQFLSDO�DQG�UHODWHG�LQWHUHVW������������

Page 22: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

���

/LPLWDWLRQV�RI�WKH�5HFRYHU\�5DWLQJV�6FDOH�6SHFLILF�OLPLWDWLRQV�UHOHYDQW�WR�WKH�5HFRYHU\�5DWLQJV�VFDOH�LQFOXGH��y� 7KH�UDWLQJV�GR�QRW�SUHGLFW�D�VSHFLILF�SHUFHQWDJH�RI�UHFRYHU\�VKRXOG�D�GHIDXOW�RFFXU��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�PDUNHW�YDOXH�RI�DQ\�LVVXHU¶V�VHFXULWLHV�RU�VWRFN��RU�WKH�OLNHOLKRRG�WKDW�WKLV�YDOXH�PD\�FKDQJH��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�OLTXLGLW\�RI�WKH�LVVXHU¶V�VHFXULWLHV�RU�VWRFN��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�DQ\�TXDOLW\�UHODWHG�WR�DQ�LVVXHU�RU�WUDQVDFWLRQ¶V�SURILOH�RWKHU�WKDQ�WKH�DJHQF\¶V�RSLQLRQ�RQ�WKH�UHODWLYH�

ORVV�VHYHULW\�RI�WKH�UDWHG�REOLJDWLRQ�VKRXOG�WKH�REOLJDWLRQ�GHIDXOW���5HFRYHU\�5DWLQJV��LQ�SDUWLFXODU��UHIOHFW�D�IXQGDPHQWDO�DQDO\VLV�RI�WKH�XQGHUO\LQJ�UHODWLRQVKLS�EHWZHHQ�ILQDQFLDO�FODLPV�RQ�DQ�HQWLW\�RU�WUDQVDFWLRQ�DQG�SRWHQWLDO�VRXUFHV�WR�PHHW�WKRVH�FODLPV��7KH�VL]H�RI�VXFK�VRXUFHV�DQG�FODLPV�LV�VXEMHFW�WR�D�ZLGH�YDULHW\�RI�G\QDPLF�IDFWRUV�RXWVLGH�WKH�DJHQF\¶V�DQDO\VLV��ZKLFK�ZLOO�LQIOXHQFH�DFWXDO�UHFRYHU\�UDWHV���5DWLQJV�DVVLJQHG�E\�)LWFK�5DWLQJV�DUWLFXODWH�DQ�RSLQLRQ�RQ�GLVFUHWH�DQG�VSHFLILF�DUHDV�RI�ULVN��7KH�DERYH�OLVW�LV�QRW�H[KDXVWLYH��DQG�LV�SURYLGHG�IRU�WKH�UHDGHU¶V�FRQYHQLHQFH��5HDGHUV�DUH�UHTXHVWHG�WR�UHYLHZ�WKH�VHFWLRQ�Understanding Credit Ratings - Limitations and Usage�IRU�IXUWKHU�LQIRUPDWLRQ�RQ�WKH�OLPLWDWLRQV�RI�WKH�DJHQF\¶V�UDWLQJV���

Page 23: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$����2WKHU�,QWHUQDWLRQDO�&UHGLW�5DWLQJV�$����� %DQN�6XSSRUW�9LDELOLW\��DQG�,QGLYLGXDO�5DWLQJV��$��������6XSSRUW�5DWLQJV��The Purpose and Function of Support Ratings 6XSSRUW�5DWLQJV� DUH�)LWFK�5DWLQJV¶� DVVHVVPHQW� RI� D�SRW HQWLDO� VXSSRUWHU¶V� SURSHQVLW\� WR� VXSSRUW� D� EDQN� DQG�RI � LWV�DELOLW\�WR�VXSSRUW�LW��,WV�SURSHQVLW\�WR�VXSSRUW�LV�D�MXGJPHQW�PDGH�E\�)LWFK�5DWLQJV��,WV�DELOLW\�WR�VXSSRUW�LV�VHW�E\�WKH�SRWHQWLDO�VXSSRUWHU¶V�RZQ�,VVXHU�'HIDXOW�5DWLQJV��ERWK�LQ�IRUHLJQ�FXUUHQF\�DQG��ZKHUH�DSSURSULDWH��LQ�ORFDO�FXUUHQF\��6XSSRUW�5DWLQJV�GR�QRW�DVVHVV�WKH�LQWULQVLF�FUHGLW�TXDOLW\�RI�D�EDQN��5DWKHU�WKH\�FRPPXQLFDWH�WKH�DJHQF\¶V�MXGJPHQW�RQ� ZKHWKHU� WKH� EDQN� ZRXOG� UHFHLYH� VXSSRUW� VKRXOG� WKLV� EHFRPH� QHFHVVDU\�� 7KHVH� UDWLQJV� DUH� H[FOXVLYHO\� WKH�H[SUHVVLRQ�RI�)LWFK�5DWLQJV¶�RSLQLRQ�HYHQ�WKRXJK�WKH�SULQFLSOHV�XQGHUO\LQJ�WKHP�PD\�KDYH�EHHQ�GLVFXVVHG�ZLWK�WKH�UHOHYDQW�VXSHUYLVRU\�DXWKRULWLHV�DQG�RU�RZQHUV���Timeliness and Effectiveness Requirements )LWFK�5DWLQJV¶�6XSSRUW�5DWLQJ�GHILQLWLRQV�DUH�SUHGLFDWHG�RQ�WKH�DVVXPSWLRQ�WKDW�DQ\�QHFHVVDU\�³VXSSRUW´�LV�SURYLGHG�RQ�D� WLPHO\�EDVLV��7KH�GHILQLWLRQV�DUH�DOVR�SUHGLFDWHG�RQ� WKH�DVVXPSWLRQ� WKDW�DQ\� QHFHVVDU\�VXSSRUW�ZLOO� EH�VXIILFLHQWO\�VXVWDLQHG�VR�WKDW�WKH�EDQN�EHLQJ�VXSSRUWHG�LV�DEOH�WR�FRQWLQXH�PHHWLQJ�LWV�ILQDQFLDO�FRPPLWPHQWV�XQWLO�WKH�FULVLV�LV�RYHU����Obligations and Financial Instruments Covered ,Q� WHUPV�RI� WKHVH�GHILQLWLRQV��XQOHVV�RWKHUZLVH�VSHFLILHG��³VXSSRUW´� LV�GHHPHG�WR�EH� LQ� WHUPV�RI� IRUHLJQ�FXUUHQF\�� ,W� LV�DVVXPHG� WKDW� W\SLFDOO\� WKH� IROORZLQJ� REOLJDWLRQV� ZLOO� EH�V XSSRUWHG�� VHQLRU� GHEW� �VHFXUHG� DQG�XQV HFXUHG��� LQFOXGLQJ�LQVXUHG�DQG�XQLQVXUHG�GHSRVLWV��UHWDLO��ZKROHVDOH�DQG�LQWHUEDQN���REOLJDWLRQV�DULVLQJ�IURP�GHULYDWLYHV�WUDQVDFWLRQV�DQG�IURP� OHJDOO\� HQIRUFHDEOH� JXDUDQWHHV� DQG� LQGHPQLWLHV�� OHWWHUV� RI� FUHGLW�� DQG� DFFHSWDQFHV�� WUDGH� UHFHLYDEOHV� DQG�REOLJDWLRQV�DULVLQJ�IURP�FRXUW�MXGJPHQWV���/LNHZLVH��WKH�DJHQF\�GRHV�QRW�DVVXPH�WKDW�WKH�IROORZLQJ�FDSLWDO�LQVWUXPHQWV�ZLOO�EH�VXSSRUWHG�ZKHQ�VRYHUHLJQ�VXSSRUW�LV� LQYROYHG�� SUHIHUHQFH�SUHIHUUHG� VKDUHV� RU� VWRFN�� K\EULG� FDSLWDO� �WLHU� �� DQG� XSSHU� WLHU� ���� LQFOXGLQJ� UHVHUYH� FDSLWDO�LQVWUXPHQWV��5&,V��DQG�YDULDWLRQV�XSRQ�5&,V��DQG�FRPPRQ�RUGLQDU\�HTXLW\�FDSLWDO��,W�LV�DOVR�DVVXPHG�WKDW�WKHUH�ZLOO�EH�QR�VXSSRUW�IRU�DQ\�PRUDO�REOLJDWLRQ�RQ�VHFXULWL]DWLRQV��7KH�VRYHUHLJQ�VXSSRUW�VWDWXV�RI�VXERUGLQDWHG�GHEW�LV�GLIILFXOW�WR�FDWHJRUL]H�LQ�DGYDQFH��LW�LV�DVVHVVHG�RQ�D�FDVH�E\�FDVH�EDVLV��GLVWLQJXLVKLQJ�DPRQJ�GLIIHUHQW�MXULVGLFWLRQV���Definitions: 1: $�EDQN� IRU�ZKLFK� WKHUH� LV�DQ�H[WUHPHO\�KLJK�SUREDELOLW\�RI�H[WHUQDO�VXSSRUW��7KH�SRWHQWLDO�SURYLGHU�RI�VXSSRUW� LV�YHU\�KLJKO\�UDWHG�LQ�LWV�RZQ�ULJKW�DQG�KDV�D�YHU\�KLJK�SURSHQVLW\�WR�VXSSRUW�WKH�EDQN�LQ�TXHVWLRQ��7KLV�SUREDELOLW\�RI�VXSSRUW�LQGLFDWHV�D�PLQLPXP�/RQJ�7HUP�5DWLQJ�IORRU�RI�µ$�¶���2: $�EDQN�IRU�ZKLFK�WKHUH�LV�D�KLJK�SUREDELOLW\�RI�H[WHUQDO�VXSSRUW��7KH�SRWHQWLDO�SURYLGHU�RI�VXSSRUW� LV�KLJKO\�UDWHG�LQ�LWV�RZQ�ULJKW�DQG�KDV�D�KLJK�SURSHQVLW\�WR�SURYLGH�VXSSRUW�WR�WKH�EDQN�LQ�TXHVWLRQ��7KLV�SUREDELOLW\�RI�VXSSRUW�LQGLFDWHV�D�PLQLPXP�/RQJ�7HUP�5DWLQJ�IORRU�RI�µ%%%�¶����3: $�EDQN�IRU�ZKLFK�WKHUH�LV�D�PRGHUDWH�SUREDELOLW\�RI�VXSSRUW�EHFDXVH�RI�XQFHUWDLQWLHV�DERXW�WKH�DELOLW\�RU�SURSHQVLW\�RI�WKH�SRWHQWLDO�SURYLGHU�RI�VXSSRUW� WR�GR�VR��7KLV�SUREDELOLW\�RI�VXSSRUW� LQGLFDWHV�D�PLQLPXP�/RQJ�7HUP�5DWLQJ�IORRU�RI�µ%%�¶���

Page 24: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

4: $�EDQN�IRU�ZKLFK�WKHUH�LV�D�OLPLWHG�SUREDELOLW\�RI�VXSSRUW�EHFDXVH�RI�VLJQLILFDQW�XQFHUWDLQWLHV�DERXW�WKH�DELOLW\�RU�SURSHQVLW\�RI�DQ\�SRVVLEOH�SURYLGHU�RI�VXSSRUW�WR�GR�VR��7KLV�SUREDELOLW\�RI�VXSSRUW�LQGLFDWHV�D�PLQLPXP�/RQJ�7HUP�5DWLQJ�IORRU�RI�µ%¶���5: $�EDQN�IRU�ZKLFK�WKHUH� LV�D�SRVVLELOLW\�RI�H[WHUQDO�VXSSRUW��EXW�LW�FDQQRW�EH�UHOLHG�XSRQ��7KLV�PD\�EH�GXH�WR�D� ODFN�RI�SURSHQVLW\� WR�SURYLGH�VXSSRUW�RU� WR�YHU\�ZHDN� ILQDQFLDO�DELOLW\� WR�GR�VR��7KLV�SUREDELOLW\�RI�VXSSRUW� LQGLFDWHV�D�/RQJ�7HUP�5DWLQJ�IORRU�QR�KLJKHU�WKDQ�µ%�¶�DQG�LQ�PDQ\�FDVHV��QR�IORRU�DW�DOO���Support Rating Floor 6XSSRUW�5DWLQJ�)ORRUV�DUH�GLUHFWO\�GHULYHG�IURP�WKH�DJHQF\¶V�6XSSRUW�5DWLQJV�LQ�WKRVH�FDVHV�ZKHUH�WKH�6XSSRUW�5DWLQJ�LV�EDVHG�RQ�SRWHQWLDO�VRYHUHLJQ�VXSSRUW��,Q�H[DFWO\�WKH�VDPH�ZD\�DV�WKH�6XSSRUW�5DWLQJ�LWVHOI��WKH�6XSSRUW�5DWLQJ�)ORRU�LV�EDVHG�RQ�WKH�DJHQF\¶V�MXGJPHQW�RI�D�SRWHQWLDO�VXSSRUWHU¶V�SURSHQVLW\�WR�VXSSRUW�D�EDQN�DQG�RI�LWV�DELOLW\�WR�VXSSRUW�LW��6XSSRUW� 5DWLQJ� )ORRUV� GR� QRW� DVVHVV� WKH� LQWULQVLF� FUHGLW� TXDOLW\� RI� D�E DQN�� 5DWKHU� WKH\� FRPPXQLFDWH� WKH� DJHQF\¶V�MXGJPHQW� RQ� ZKHWKHU� WKH� EDQN� ZRXOG� UHFHLYH� VXSSRUW� VKRXOG� WKLV� EHFRPH� QHFHVVDU\�� ,W� LV� HPSKDVL]HG� WKDW� WKHVH�UDWLQJV�DUH�H[FOXVLYHO\�WKH�H[SUHVVLRQ�RI�)LWFK�5DWLQJV¶�RSLQLRQ�HYHQ�WKRXJK�WKH�SULQFLSOHV�XQGHUO\LQJ�WKHP�PD\�KDYH�EHHQ�GLVFXVVHG�ZLWK�WKH�UHOHYDQW�VXSHUYLVRU\�DXWKRULWLHV���7KH�6XSSRUW�5DWLQJ�)ORRU�LV�H[SUHVVHG�RQ�WKH�µ$$$¶�ORQJ�WHUP�VFDOH�DQG�ZLOO�FOHDUO\�LQGLFDWH�WKH�OHYHO�EHORZ�ZKLFK�WKH�DJHQF\� ZRXOG� QRW� H[SHFW� WR� ORZHU� LWV� ,VVXHU� 'HIDXOW� 5DWLQJ� LQ� WKH� DEVHQFH� RI� DQ\� FKDQJHV� WR� WKH� DVVXPSWLRQV�XQGHUSLQQLQJ�WKH�EDQN¶V�6XSSRUW�5DWLQJ��,Q�DGGLWLRQ�WR�WKH�µ$$$¶�VFDOH��WKHUH�ZLOO�EH�RQH�DGGLWLRQDO�SRLQW�RQ�WKH�VFDOH�±�³1R�)ORRU´��1)��±�ZKLFK�LQGLFDWHV�WKDW�LQ�WKH�DJHQF\¶V�RSLQLRQ��WKHUH�LV�QR�UHDVRQDEOH�SUHVXPSWLRQ�RI�SRWHQWLDO�VXSSRUW�EHLQJ�IRUWKFRPLQJ��,Q�SUDFWLFH�WKLV�DSSUR[LPDWHV�WR�D�SUREDELOLW\�RI�VXSSRUW�RI�OHVV�WKDQ������

Page 25: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$��������%DQN�9LDELOLW\�5DWLQJV�9LDELOLW\� UDWLQJV� �95V�� DUH� GHVLJQHG� WR� EH�L QWHUQDWLRQDOO\� FRPSDUDEOH� DQG� UHSUHVHQW� )LWFK¶V� YLHZ� DV� WR� WKH� LQWULQVLF�FUHGLWZRUWKLQHVV�RI�DQ�LVVXHU��7RJHWKHU�ZLWK�WKH�DJHQF\¶V�VXSSRUW�UDWLQJV�IUDPHZRUN��WKH�95�LV�D�NH\�FRPSRQHQW�RI�D�EDQN¶V�,VVXHU�'HIDXOW�5DWLQJ��,'5��DQG�FRQVLGHUV�YDULRXV�IDFWRUV�LQFOXGLQJ���

x� ,QGXVWU\�SURILOH�DQG�RSHUDWLQJ�HQYLURQPHQW�x� &RPSDQ\�SURILOH�DQG�ULVN�PDQDJHPHQW�x� )LQDQFLDO�SURILOH�x� 0DQDJHPHQW�VWUDWHJ\�DQG�FRUSRUDWH�JRYHUQDQFH��

�95V�DUH�DVVLJQHG�WR�EDQN�RSHUDWLQJ�FRPSDQLHV��EDQN�KROGLQJ�FRPSDQLHV�DQG�LQ�OLPLWHG�FDVHV��WR�VLPLODU�OHJDO�HQWLWLHV�ZKHUH� LW� LV� FRQVLGHUHG� XVHIXO� WR� FODULI\� WKH� VRXUFH� RI� DQ�HQ WLW\V� ILQDQFLDO� VWUHQJWK�� 1RWDEO\�� WKH� 95� H[FOXGHV� DQ\�H[WUDRUGLQDU\�VXSSRUW�WKDW�PD\�EH�GHULYHG�IURP�RXWVLGH�RI�WKH�HQWLW\�DV�ZHOO�DV�H[FOXGLQJ�SRWHQWLDO�EHQHILWV�WR�D�EDQN¶V�ILQDQFLDO�SRVLWLRQ�IURP�RWKHU�H[WUDRUGLQDU\�PHDVXUHV��LQFOXGLQJ�D�GLVWUHVVHG�UHVWUXFWXULQJ�RI�OLDELOLWLHV���6SHFLILFDOO\��)LWFK�ZRXOG�QRUPDOO\�UHJDUG�WKH�IROORZLQJ�DV�LQGLFDWLYH�RI�D�EDQN�IDLOLQJ�RU�EHFRPLQJ�QRQ�YLDEOH��

x� 'HIDXOWLQJ�RQ�VHQLRU�REOLJDWLRQV�x� (QWHULQJ�D�UHVROXWLRQ�UHJLPH��EDQNUXSWF\��DGPLQLVWUDWLYH�UHFHLYHUVKLS�RU�VLPLODU�VWDWXWRU\�SURFHVV��x� 7ULJJHULQJ�QRQ�YLDELOLW\�FODXVHV�HPEHGGHG�LQ�UHJXODWRU\��RU�RWKHU��FDSLWDO�LQVWUXPHQWV��x� ([HFXWLRQ�RI�D�GLVWUHVVHG�GHEW�H[FKDQJH�DV�GHILQHG�E\�)LWFK¶V�FULWHULD��x� 5HFHLSW�RI�H[WUDRUGLQDU\�VXSSRUW�VXFK�WKDW�D�GHIDXOW�RU�RWKHU�HYHQW�RI�QRQ�YLDELOLW\�LV�DYRLGHG��

�95V�UHSUHVHQW�QRW�RQO\�WKH�FDSDFLW\�RI�D�UDWHG�HQWLW\�WR�PHHW�LWV�REOLJDWLRQV�LQ�WKH�DEVHQFH�RI�H[WUDRUGLQDU\�VXSSRUW�EXW�DOVR� LQ� WKH� DEVHQFH� RI� H[WUDRUGLQDU\� FRQVWUDLQWV� �HJ�� WUDQVIHU� DQG�F RQYHUWLELOLW\� ULVN��� $V� VXFK�� 95V� UHSUHVHQW� WKH�FDSDFLW\�RI� WKH�EDQN� WR�PDLQWDLQ�RQ�JRLQJ�RSHUDWLRQV�DQG�WR�DYRLG� IDLOXUH�� WKH� ODWWHU�EHLQJ� LQGLFDWHG�E\�H[WUDRUGLQDU\�DQG�FRPSDQ\�VSHFLILF�PHDVXUHV�EHFRPLQJ�QHFHVVDU\�WR�SURWHFW�DJDLQVW�D�EDQNV�GHIDXOW����aaa���+LJKHVW�IXQGDPHQWDO�FUHGLW�TXDOLW\��µDDD¶�UDWLQJV�GHQRWH�WKH�EHVW�SURVSHFWV�IRU�RQ�JRLQJ�YLDELOLW\�DQG�ORZHVW�H[SHFWDWLRQ�RI�IDLOXUH�ULVN��7KH\�DUH�DVVLJQHG�RQO\�WR�EDQNV�ZLWK�H[WUHPHO\�VWURQJ�DQG�VWDEOH�IXQGDPHQWDO�FKDUDFWHULVWLFV��VXFK�WKDW�WKH\�DUH�PRVW�XQOLNHO\�WR�KDYH�WR�UHO\�RQ�H[WUDRUGLQDU\�VXSSRUW�WR�DYRLG�GHIDXOW��7KLV�FDSDFLW\�LV�KLJKO\�XQOLNHO\�WR�EH�DGYHUVHO\�DIIHFWHG�E\�IRUHVHHDEOH�HYHQWV� �aa���9HU\�KLJK�IXQGDPHQWDO�FUHGLW�TXDOLW\�µDD¶�UDWLQJV�GHQRWH�YHU\�VWURQJ�SURVSHFWV�IRU�RQ�JRLQJ�YLDELOLW\��)XQGDPHQWDO�FKDUDFWHULVWLFV�DUH�YHU\�VWURQJ�DQG�VWDEOH��VXFK�WKDW�LW�LV�FRQVLGHUHG�KLJKO\�XQOLNHO\�WKDW�WKH�EDQN�ZRXOG�KDYH�WR�UHO\�RQ�H[WUDRUGLQDU\�VXSSRUW�WR�DYRLG�GHIDXOW��7KLV�FDSDFLW\�LV�QRW�VLJQLILFDQWO\�YXOQHUDEOH�WR�IRUHVHHDEOH�HYHQWV�� a +LJK IXQGDPHQWDO�FUHGLW�TXDOLW\ µD¶�UDWLQJV�GHQRWH�VWURQJ�SURVSHFWV�IRU�RQ�JRLQJ�YLDELOLW\��)XQGDPHQWDO�FKDUDFWHULVWLFV�DUH�VWURQJ�DQG�VWDEOH��VXFK�WKDW�LW�LV�XQOLNHO\�WKDW�WKH�EDQN�ZRXOG�KDYH�WR�UHO\�RQ�H[WUDRUGLQDU\�VXSSRUW�WR�DYRLG�GHIDXOW��7KLV�FDSDFLW\�PD\��QHYHUWKHOHVV��EH�PRUH�YXOQHUDEOH�WR�DGYHUVH�EXVLQHVV�RU�HFRQRPLF�FRQGLWLRQV�WKDQ�LV�WKH�FDVH�IRU�KLJKHU�UDWLQJV���bbb�*RRG�IXQGDPHQWDO�FUHGLW�TXDOLW\�µEEE¶�UDWLQJV�GHQRWH�JRRG�SURVSHFWV�IRU�RQ�JRLQJ�YLDELOLW\��7KH�EDQN¶V�IXQGDPHQWDOV�DUH�DGHTXDWH��VXFK�WKDW�WKHUH�LV�D�ORZ�ULVN�WKDW�LW�ZRXOG�KDYH�WR�UHO\�RQ�H[WUDRUGLQDU\�VXSSRUW�WR�DYRLG�GHIDXOW��+RZHYHU��DGYHUVH�EXVLQHVV�RU�HFRQRPLF�FRQGLWLRQV�DUH�PRUH�OLNHO\�WR�LPSDLU�WKLV�FDSDFLW\���bb�6SHFXODWLYH�IXQGDPHQWDO�FUHGLW�TXDOLW\�µEE¶�UDWLQJV�GHQRWH�PRGHUDWH�SURVSHFWV�IRU�RQ�JRLQJ�YLDELOLW\��$�PRGHUDWH�GHJUHH�RI�IXQGDPHQWDO�ILQDQFLDO�VWUHQJWK�H[LVWV��ZKLFK�ZRXOG�KDYH�WR�EH�HURGHG�EHIRUH�WKH�EDQN�ZRXOG�KDYH�WR�UHO\�RQ�H[WUDRUGLQDU\�VXSSRUW�WR�DYRLG�GHIDXOW��

Page 26: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

+RZHYHU��DQ�HOHYDWHG�YXOQHUDELOLW\�H[LVWV�WR�DGYHUVH�FKDQJHV�LQ�EXVLQHVV�RU�HFRQRPLF�FRQGLWLRQV�RYHU�WLPH���b�+LJKO\�VSHFXODWLYH�IXQGDPHQWDO�FUHGLW�TXDOLW\�µE¶�UDWLQJV�GHQRWH�ZHDN�SURVSHFWV�IRU�RQ�JRLQJ�YLDELOLW\��0DWHULDO�IDLOXUH�ULVN�LV�SUHVHQW�EXW�D�OLPLWHG�PDUJLQ�RI�VDIHW\�UHPDLQV��7KH�EDQN¶V�FDSDFLW\�IRU�FRQWLQXHG�XQVXSSRUWHG�RSHUDWLRQ�LV�YXOQHUDEOH�WR�GHWHULRUDWLRQ�LQ�WKH�EXVLQHVV�DQG�HFRQRPLF�HQYLURQPHQW���ccc�6XEVWDQWLDO�IXQGDPHQWDO�FUHGLW�ULVN�)DLOXUH�RI�WKH�EDQN�LV�D�UHDO�SRVVLELOLW\��7KH�FDSDFLW\�IRU�FRQWLQXHG�XQVXSSRUWHG�RSHUDWLRQ�LV�KLJKO\�YXOQHUDEOH�WR�GHWHULRUDWLRQ�LQ�WKH�EXVLQHVV�DQG�HFRQRPLF�HQYLURQPHQW���cc�9HU\�KLJK�OHYHOV�RI�IXQGDPHQWDO�FUHGLW�ULVN�)DLOXUH�RI�WKH�EDQN�DSSHDUV�SUREDEOH���c �([FHSWLRQDOO\�KLJK�OHYHOV�RI�IXQGDPHQWDO�FUHGLW�ULVN�)DLOXUH�RI�WKH�EDQN�LV�LPPLQHQW�RU�LQHYLWDEOH���f µI¶�UDWLQJV�LQGLFDWH�DQ�LVVXHU�WKDW��LQ�)LWFK¶V�RSLQLRQ��KDV�IDLOHG��DQG�WKDW�HLWKHU�KDV�GHIDXOWHG�RU�ZRXOG�KDYH�GHIDXOWHG�KDG�LW�QRW�UHFHLYHG�H[WUDRUGLQDU\�VXSSRUW�RU�EHQHILWHG�IURP�RWKHU�H[WUDRUGLQDU\�PHDVXUHV�� 1RWH��7KH�PRGLILHUV�³�´�RU�³í´�PD\�EH�DSSHQGHG�WR�D�UDWLQJ�WR�GHQRWH�UHODWLYH�VWDWXs within major rating categories. Such suffixes are not added to the ‘aaa’ VR category or to VR categories below ‘b’. Outlooks are not assigned to VRs although at any point in time, a bank’s position and prospects may have underlying trends, for example improving, deteriorating or stable.

$��������%DQN�,QGLYLGXDO�5DWLQJV��)RU�+LVWRULFDO�5HIHUHQFH�2QO\�,QGLYLGXDO�5DWLQJV�ZHUH�DVVLJQHG�WR�EDQNV�WKDW�DUH�OHJDO�HQWLWLHV��7KH�WHUP�³EDQNV´�LQFOXGHG�EDQN�KROGLQJ�FRPSDQLHV�DQG�EDQFDVVXUDQFH�KROGLQJ�FRPSDQLHV��EDQFDVVXUDQFH�FRPSDQLHV�RSHUDWLQJ�DV�VLQJOH�OHJDO�HQWLWLHV��LQYHVWPHQW�EDQNV�DQG�SULYDWH�EDQNV��7KHVH�UDWLQJV�PD\�DOVR�KDYH�EHHQ�DVVLJQHG� WR� OHDVLQJ�FRPSDQLHV�� LQVWDOOPHQW�FUHGLW�FRPSDQLHV��FUHGLW�FDUG�FRPSDQLHV��EURNHUDJH�KRXVHV�� LQYHVWPHQW�PDQDJHPHQW�FRPSDQLHV�DQG�VHFXULWLHV�GHDOLQJ�FRPSDQLHV��DV�FLUFXPVWDQFHV�GHPDQG��7KHVH�UDWLQJV��ZKLFK�ZHUH�LQWHUQDWLRQDOO\�FRPSDUDEOH��DWWHPSWHG�WR�DVVHVV�KRZ�D�EDQN�ZRXOG�EH�YLHZHG�LI�LW�ZHUH�HQWLUHO\�LQGHSHQGHQW�DQG�FRXOG�QRW�UHO\�RQ�H[WHUQDO�VXSSRUW��7KHVH�UDWLQJV�ZHUH�GHVLJQHG�WR�DVVHVV�D�EDQN¶V�H[SRVXUH�WR��DSSHWLWH�IRU��DQG�PDQDJHPHQW�RI�ULVN��DQG�WKXV�UHSUHVHQWHG�WKH�DJHQF\¶V�YLHZ�RQ�WKH�OLNHOLKRRG�WKDW�LW�ZRXOG�UXQ�LQWR�VLJQLILFDQW�ILQDQFLDO�GLIILFXOWLHV�VXFK�WKDW�LW�ZRXOG�UHTXLUH�VXSSRUW���A: $�YHU\�VWURQJ�EDQN���&KDUDFWHULVWLFV� PD\� LQFOXGH� RXWVWDQGLQJ� SURILWDELOLW\� DQG� EDODQFH� VKHHW� LQWHJULW\�� IUDQFKLVH�� PDQDJHPHQW�� RSHUDWLQJ�HQYLURQPHQW�RU�SURVSHFWV���B: $�VWURQJ�EDQN���7KHUH�DUH�QR�PDMRU� FRQFHUQV� UHJDUGLQJ� WKH�EDQN��&KDUDFWHULVWLFV�PD\� LQFOXGH� VWURQJ�SURILWDELOLW\� DQG�EDODQFH�VKHHW�LQWHJULW\��IUDQFKLVH��PDQDJHPHQW��RSHUDWLQJ�HQYLURQPHQW�RU�SURVSHFWV���C: $Q�DGHTXDWH�EDQN��ZKLFK��KRZHYHU��SRVVHVVHV�RQH�RU�PRUH�WURXEOHVRPH�DVSHFWV���7KHUH�PD\�EH�VRPH�FRQFHUQV�UHJDUGLQJ�LWV�SURILWDELOLW\�DQG�EDODQFH�VKHHW�LQWHJULW\��IUDQFKLVH��PDQDJHPHQW��RSHUDWLQJ�HQYLURQPHQW�RU�SURVSHFWV����

Page 27: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

D: $�EDQN�WKDW�KDV�ZHDNQHVVHV�RI�LQWHUQDO�DQG�RU�H[WHUQDO�RULJLQ���7KHUH� DUH� FRQFHUQV� UHJDUGLQJ� LWV� SURILWDELOLW\� DQG� EDODQFH� VKHHW� LQWHJULW\�� IUDQFKLVH�� PDQDJHPHQW�� RSHUDWLQJ�HQYLURQPHQW� RU� SURVSHFWV�� %DQNV� LQ� HPHUJLQJ� PDUNHWV� DUH� QHFHVVDULO\� IDFHG� ZLWK� D�JU HDWHU� QXPEHU� RI� SRWHQWLDO�GHILFLHQFLHV�RI�H[WHUQDO�RULJLQ���E: $�EDQN�ZLWK�YHU\�VHULRXV�SUREOHPV��ZKLFK�HLWKHU�UHTXLUHV�RU�LV�OLNHO\�WR�UHTXLUH�H[WHUQDO�VXSSRUW���F: $�EDQN�WKDW�KDV�HLWKHU�GHIDXOWHG�RU�� LQ�)LWFK�5DWLQJV¶�RSLQLRQ��ZRXOG�KDYH�GHIDXOWHG� LI� LW�KDG�QRW�UHFHLYHG�H[WHUQDO�VXSSRUW��([DPSOHV�RI�VXFK�VXSSRUW�LQFOXGH�VWDWH�RU�ORFDO�JRYHUQPHQW�VXSSRUW���GHSRVLW��LQVXUDQFH�IXQGV��DFTXLVLWLRQ�E\�VRPH�RWKHU�FRUSRUDWH�HQWLW\�RU�DQ�LQMHFWLRQ�RI�QHZ�IXQGV�IURP�LWV�VKDUHKROGHUV�RU�HTXLYDOHQW���Note: Gradations may have been used among the ratings A to E: i.e. A/B, B/C, C/D, and D/E. No gradations applied to the F rating.�

Page 28: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$����� ,QVXUHU�)LQDQFLDO�6WUHQJWK�5DWLQJ�'HILQLWLRQV�7KH� ,QVXUHU� )LQDQFLDO� 6WUHQJWK� �,)6�� 5DWLQJ� SURYLGHV� DQ� DVVHVVPHQW� RI� WKH� ILQDQFLDO� VWUHQJWK� RI� DQ� LQVXUDQFH�RUJDQL]DWLRQ�� 7KH� ,)6� 5DWLQJ� LV� DVVLJQHG� WR� WKH� LQVXUDQFH� FRPSDQ\¶V� SROLF\KROGHU� REOLJDWLRQV�� LQFOXGLQJ� DVVXPHG�UHLQVXUDQFH� REOLJDWLRQV� DQG� FRQWUDFW� KROGHU� REOLJDWLRQV�� VXFK� DV� JXDUDQWHHG� LQYHVWPHQW� FRQWUDFWV�� 7KH� ,)6� 5DWLQJ�UHIOHFWV�ERWK�WKH�DELOLW\�RI�WKH�LQVXUHU�WR�PHHW�WKHVH�REOLJDWLRQV�RQ�D�WLPHO\�EDVLV��DQG�H[SHFWHG�UHFRYHULHV�UHFHLYHG�E\�FODLPDQWV�LQ�WKH�HYHQW�WKH�LQVXUHU�VWRSV�PDNLQJ�SD\PHQWV�RU�SD\PHQWV�DUH�LQWHUUXSWHG��GXH�WR�HLWKHU�WKH�IDLOXUH�RI�WKH�LQVXUHU� RU� VRPH� IRUP� RI� UHJXODWRU\� LQWHUYHQWLRQ�� ,Q� WKH� FRQWH[W� RI� WKH� ,)6� 5DWLQJ�� WKH� WLPHOLQHVV� RI� SD\PHQWV� LV�FRQVLGHUHG�UHODWLYH�WR�ERWK�FRQWUDFW�DQG�RU�SROLF\�WHUPV�EXW�DOVR�UHFRJQL]HV�WKH�SRVVLELOLW\�RI�UHDVRQDEOH�GHOD\V�FDXVHG�E\� FLUFXPVWDQFHV� FRPPRQ� WR� WKH� LQVXUDQFH� LQGXVWU\�� LQFOXGLQJ� FODLPV� UHYLHZV�� IUDXG� LQYHVWLJDWLRQV� DQG� FRYHUDJH�GLVSXWHV���7KH� ,)6�5DWLQJ� GRHV� QRW� HQFRPSDVV� SROLF\KROGHU� REOLJDWLRQV� UHVLGLQJ� LQ� VHSDUDWH� DFFRXQWV�� XQLW�OLQNHG� SURGXFWV� RU�VHJUHJDWHG�IXQGV��IRU�ZKLFK�WKH�SROLF\KROGHU�EHDUV�LQYHVWPHQW�RU�RWKHU�ULVNV��+RZHYHU��DQ\�JXDUDQWHHV�SURYLGHG�WR�WKH�SROLF\KROGHU�ZLWK�UHVSHFW�WR�VXFK�REOLJDWLRQV�DUH�LQFOXGHG�LQ�WKH�,)6�5DWLQJ���([SHFWHG�UHFRYHULHV�DUH�EDVHG�RQ�WKH�DJHQF\¶V�DVVHVVPHQWV�RI�WKH�VXIILFLHQF\�RI�DQ�LQVXUDQFH�FRPSDQ\¶V�DVVHWV�WR�IXQG�SROLF\KROGHU�REOLJDWLRQV��LQ�D�VFHQDULR�LQ�ZKLFK�SD\PHQWV�KDYH�FHDVHG�RU�EHHQ�LQWHUUXSWHG��$FFRUGLQJO\��H[SHFWHG�UHFRYHULHV� H[FOXGH� WKH� LPSDFW� RI� UHFRYHULHV� REWDLQHG� IURP� DQ\� JRYHUQPHQW� VSRQVRUHG� JXDUDQW\� RU� SROLF\KROGHU�SURWHFWLRQ�IXQGV��([SHFWHG�UHFRYHULHV�DOVR�H[FOXGH�WKH�LPSDFW�RI�FROODWHUDOL]DWLRQ�RU�VHFXULW\��VXFK�DV�OHWWHUV�RI�FUHGLW�RU�WUXVWHHG�DVVHWV��VXSSRUWLQJ�VHOHFW�UHLQVXUDQFH�REOLJDWLRQV���,)6�5DWLQJV� FDQ� EH� DVVLJQHG� WR� LQVXUDQFH� DQG� UHLQVXUDQFH� FRPSDQLHV� LQ� DQ\� LQVXUDQFH� VHFWRU�� LQFOXGLQJ� WKH� OLIH��DQQXLW\��QRQ�OLIH��SURSHUW\�FDVXDOW\��KHDOWK��PRUWJDJH��ILQDQFLDO�JXDUDQW\��UHVLGXDO�YDOXH�DQG�WLWOH�LQVXUDQFH�VHFWRUV��DV�ZHOO�DV�WR�PDQDJHG�FDUH�FRPSDQLHV�VXFK�DV�KHDOWK�PDLQWHQDQFH�RUJDQL]DWLRQV���7KH�,)6�5DWLQJ�GRHV�QRW�DGGUHVV�WKH�TXDOLW\�RI�DQ�LQVXUHU¶V�FODLPV�KDQGOLQJ�VHUYLFHV�RU�WKH�UHODWLYH�YDOXH�RI�SURGXFWV�VROG���7KH�,)6�5DWLQJ�XVHV�WKH�VDPH�V\PEROV�XVHG�E\�WKH�DJHQF\�IRU�LWV�,QWHUQDWLRQDO�DQG�1DWLRQDO�FUHGLW�UDWLQJV�RI�ORQJ�WHUP�RU�VKRUW�WHUP�GHEW� LVVXHV��+RZHYHU�� WKH�GHILQLWLRQV�DVVRFLDWHG�ZLWK� WKH� UDWLQJV� UHIOHFW� WKH�XQLTXH�DVSHFWV�RI� WKH� ,)6�5DWLQJ�ZLWKLQ�DQ�LQVXUDQFH�LQGXVWU\�FRQWH[W���2EOLJDWLRQV�IRU�ZKLFK�D�SD\PHQW�LQWHUUXSWLRQ�KDV�RFFXUUHG�GXH�WR�HLWKHU�WKH�LQVROYHQF\�RU�IDLOXUH�RI�WKH�LQVXUHU�RU�VRPH�IRUP�RI�UHJXODWRU\� LQWHUYHQWLRQ�ZLOO�JHQHUDOO\�EH�UDWHG�EHWZHHQ� µ%¶�DQG� µ&¶�RQ� WKH�/RQJ�7HUP�,)6�5DWLQJ�VFDOHV��ERWK�,QWHUQDWLRQDO� DQG�1DWLRQDO��� ,QWHUQDWLRQDO�6KRUW�7HUP� ,)6�5DWLQJV� DVVLJQHG�XQGHU� WKH� VDPH� FLUFXPVWDQFHV�ZLOO� DOLJQ�ZLWK�WKH�LQVXUHU¶V�,QWHUQDWLRQDO�/RQJ�7HUP�,)6�5DWLQJ���

Page 29: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$��������/RQJ�7HUP�,QWHUQDWLRQDO�,)6�5DWLQJV�7KH� IROORZLQJ� UDWLQJ� VFDOH� DSSOLHV� WR� IRUHLJQ� FXUUHQF\� DQG� ORFDO� FXUUHQF\� UDWLQJV�� 5DWLQJV� RI� µ%%%�¶� DQG� KLJKHU� DUH�FRQVLGHUHG�³VHFXUH´��DQG�WKRVH�RI�µ%%�¶�DQG�ORZHU�DUH�FRQVLGHUHG�³YXOQHUDEOH´���AAA: Exceptionally strong. µ$$$¶� ,)6�5DWLQJV�GHQRWH� WKH� ORZHVW�H[SHFWDWLRQ�RI� FHDVHG�RU� LQWHUUXSWHG�SD\PHQWV��7KH\�DUH� DVVLJQHG�RQO\� LQ� WKH�FDVH�RI�H[FHSWLRQDOO\�VWURQJ�FDSDFLW\�WR�PHHW�SROLF\KROGHU�DQG�FRQWUDFW�REOLJDWLRQV��7KLV�FDSDFLW\�LV�KLJKO\�XQOLNHO\�WR�EH�DGYHUVHO\�DIIHFWHG�E\�IRUHVHHDEOH�HYHQWV���AA: Very strong. µ$$¶�,)6�5DWLQJV�GHQRWH�D�YHU\�ORZ�H[SHFWDWLRQ�RI�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV��7KH\�LQGLFDWH�YHU\�VWURQJ�FDSDFLW\�WR�PHHW�SROLF\KROGHU�DQG�FRQWUDFW�REOLJDWLRQV��7KLV�FDSDFLW\�LV�QRW�VLJQLILFDQWO\�YXOQHUDEOH�WR�IRUHVHHDEOH�HYHQWV���A: Strong. µ$¶� ,)6�5DWLQJV�GHQRWH�D� ORZ�H[SHFWDWLRQ�RI� FHDVHG�RU� LQWHUUXSWHG�SD\PHQWV��7KH\� LQGLFDWH� VWURQJ�FDSDFLW\� WR�PHHW�SROLF\KROGHU�DQG�FRQWUDFW�REOLJDWLRQV��7KLV�FDSDFLW\�PD\��QRQHWKHOHVV��EH�PRUH�YXOQHUDEOH�WR�FKDQJHV�LQ�FLUFXPVWDQFHV�RU�LQ�HFRQRPLF�FRQGLWLRQV�WKDQ�LV�WKH�FDVH�IRU�KLJKHU�UDWLQJV���BBB: Good. µ%%%¶�,)6�5DWLQJV�LQGLFDWH�WKDW�WKHUH�LV�FXUUHQWO\�D�ORZ�H[SHFWDWLRQ�RI�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV��7KH�FDSDFLW\�WR�PHHW� SROLF\KROGHU� DQG� FRQWUDFW� REOLJDWLRQV� RQ� D� WLPHO\� EDVLV� LV� FRQVLGHUHG� DGHTXDWH�� EXW� DGYHUVH� FKDQJHV� LQ�FLUFXPVWDQFHV�DQG�HFRQRPLF�FRQGLWLRQV�DUH�PRUH�OLNHO\�WR�LPSDFW�WKLV�FDSDFLW\����BB: Moderately weak. µ%%¶�,)6�5DWLQJV�LQGLFDWH�WKDW�WKHUH�LV�DQ�HOHYDWHG�YXOQHUDELOLW\�WR�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV��SDUWLFXODUO\�DV�WKH�UHVXOW�RI�DGYHUVH�HFRQRPLF�RU�PDUNHW�FKDQJHV�RYHU�WLPH��+RZHYHU��EXVLQHVV�RU�ILQDQFLDO�DOWHUQDWLYHV�PD\�EH�DYDLODEOH�WR�DOORZ�IRU�SROLF\KROGHU�DQG�FRQWUDFW�REOLJDWLRQV�WR�EH�PHW�LQ�D�WLPHO\�PDQQHU����B: Weak. µ%¶�,)6�5DWLQJV�LQGLFDWH�WZR�SRVVLEOH�FRQGLWLRQV��,I�REOLJDWLRQV�DUH�VWLOO�EHLQJ�PHW�RQ�D�WLPHO\�EDVLV��WKHUH�LV�VLJQLILFDQW�ULVN�WKDW�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV�FRXOG�RFFXU�LQ�WKH�IXWXUH��EXW�D�OLPLWHG�PDUJLQ�RI�VDIHW\�UHPDLQV��&DSDFLW\�IRU�FRQWLQXHG� WLPHO\� SD\PHQWV� LV� FRQWLQJHQW� XSRQ� D�V XVWDLQHG�� IDYRUDEOH� EXVLQHVV� DQG�HF RQRPLF� HQYLURQPHQW�� DQG�IDYRUDEOH�PDUNHW�FRQGLWLRQV��$OWHUQDWLYHO\��D�µ%¶�,)6�5DWLQJ�LV�DVVLJQHG�WR�REOLJDWLRQV�WKDW�KDYH�H[SHULHQFHG�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV��EXW�ZLWK�WKH�SRWHQWLDO�IRU�H[WUHPHO\�KLJK�UHFRYHULHV��6XFK�REOLJDWLRQV�ZRXOG�SRVVHVV�D�UHFRYHU\�DVVHVVPHQW�RI�µ55�¶��2XWVWDQGLQJ����CCC: Very weak. µ&&&¶�,)6�5DWLQJV� LQGLFDWH�WZR�SRVVLEOH�FRQGLWLRQV�� ,I�REOLJDWLRQV�DUH�VWLOO�EHLQJ�PHW�RQ�D�WLPHO\�EDVLV��WKHUH�LV�D�UHDO�SRVVLELOLW\� WKDW� FHDVHG�RU� LQWHUUXSWHG�SD\PHQWV� FRXOG�RFFXU� LQ� WKH� IXWXUH��&DSDFLW\� IRU� FRQWLQXHG� WLPHO\�SD\PHQWV� LV�VROHO\� UHOLDQW� XSRQ� D�V XVWDLQHG�� IDYRUDEOH� EXVLQHVV� DQG�HF RQRPLF� HQYLURQPHQW�� DQG�I DYRUDEOH� PDUNHW� FRQGLWLRQV��$OWHUQDWLYHO\��D�µ&&&¶�,)6�5DWLQJ�LV�DVVLJQHG�WR�REOLJDWLRQV�WKDW�KDYH�H[SHULHQFHG�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV��DQG�ZLWK�WKH�SRWHQWLDO�IRU�DYHUDJH�WR�VXSHULRU�UHFRYHULHV��6XFK�REOLJDWLRQV�ZRXOG�SRVVHVV�D�UHFRYHU\�DVVHVVPHQW�RI�µ55�¶��6XSHULRU���µ55�¶��*RRG���DQG�µ55�¶��$YHUDJH����CC: Extremely weak. µ&&¶�,)6�5DWLQJV�LQGLFDWH�WZR�SRVVLEOH�FRQGLWLRQV��,I�REOLJDWLRQV�DUH�VWLOO�EHLQJ�PHW�RQ�D�WLPHO\�EDVLV��LW�LV�SUREDEOH�WKDW�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV�ZLOO�RFFXU�LQ�WKH�IXWXUH��$OWHUQDWLYHO\��D�µ&&¶�,)6�5DWLQJ�LV�DVVLJQHG�WR�REOLJDWLRQV�WKDW�KDYH�H[SHULHQFHG�FHDVHG�RU� LQWHUUXSWHG�SD\PHQWV��ZLWK� WKH�SRWHQWLDO� IRU�DYHUDJH�WR�EHORZ�DYHUDJH�UHFRYHULHV��6XFK�REOLJDWLRQV�ZRXOG�SRVVHVV�D�UHFRYHU\�DVVHVVPHQW�RI�µ55�¶��$YHUDJH��RU�µ55�¶��%HORZ�$YHUDJH���

Page 30: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

�C: Distressed µ&¶� ,)6� 5DWLQJV� LQGLFDWH� WZR� SRVVLEOH� FRQGLWLRQV�� ,I� REOLJDWLRQV� DUH� VWLOO� EHLQJ� PHW� RQ�D � WLPHO\� EDVLV�� FHDVHG� RU�LQWHUUXSWHG�SD\PHQWV�DUH�LPPLQHQW��$OWHUQDWLYHO\��D�µ&¶�,)6�5DWLQJ�LV�DVVLJQHG�WR�REOLJDWLRQV�WKDW�KDYH�H[SHULHQFHG�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV��DQG�ZLWK�WKH�SRWHQWLDO�IRU�EHORZ�DYHUDJH�WR�SRRU�UHFRYHULHV��6XFK�REOLJDWLRQV�ZRXOG�SRVVHVV�D�UHFRYHU\�DVVHVVPHQW�RI�µ55�¶��%HORZ�$YHUDJH��RU�µ55�¶��3RRU����Notes: “+” or “-” may be appended to a rating to indicate the relative position of a credit within the rating category. Such suffixes are not added to ratings in the ‘AAA’ category or to ratings below the ‘B’ category.�

Page 31: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$���������6KRUW�7HUP�,)6�5DWLQJV�$�6KRUW�7HUP� ,QVXUHU� )LQDQFLDO� 6WUHQJWK�5DWLQJ� �67�,)6�5DWLQJ�� SURYLGHV� DQ�DV VHVVPHQW� RI� WKH� QHDU�WHUP� ILQDQFLDO�KHDOWK�RI�DQ� LQVXUDQFH�RUJDQL]DWLRQ��DQG� LWV�FDSDFLW\� WR�PHHW�VHQLRU�REOLJDWLRQV� WR�SROLF\KROGHUV�DQG�FRQWUDFW�KROGHUV�WKDW�ZRXOG�EH�H[SHFWHG�WR�EH�GXH�ZLWKLQ�RQH�\HDU��7KH�DQDO\VLV�VXSSRUWLQJ�WKH�67�,)6�5DWLQJ�HQFRPSDVVHV�DOO�RI�WKH�IDFWRUV� FRQVLGHUHG� ZLWKLQ� WKH� FRQWH[W� RI� WKH� ,)6� 5DWLQJ�� EXW� ZLWK� JUHDWHU� ZHLJKWLQJ� JLYHQ� WR� DQ� LQVXUHU¶V� QHDU�WHUP�OLTXLGLW\�� ILQDQFLDO� IOH[LELOLW\�DQG� UHJXODWRU\�VROYHQF\�FKDUDFWHULVWLFV��DQG� OHVV�ZHLJKW�JLYHQ� WR� ORQJHU�WHUP� LVVXHV�VXFK�DV�FRPSHWLWLYHQHVV�DQG�HDUQLQJV�WUHQGV���7KH�DJHQF\�ZLOO�RQO\�DVVLJQ�D�67�,)6�5DWLQJ�WR�LQVXUHUV�WKDW�DOVR�KDYH�EHHQ�DVVLJQHG�DQ�,)6�5DWLQJ��&XUUHQWO\��67�,)6�5DWLQJV�DUH�XVHG�SULPDULO\�E\�8�6��OLIH�LQVXUDQFH�FRPSDQLHV�WKDW�VHOO�VKRUW�WHUP�IXQGLQJ�DJUHHPHQWV���7KH�67�,)6�5DWLQJ�XVHV�WKH�VDPH�LQWHUQDWLRQDO�UDWLQJV�VFDOH�XVHG�E\�WKH�DJHQF\�IRU�VKRUW�WHUP�GHEW�DQG�LVVXHU�UDWLQJV����F1 ,QVXUHUV� DUH� YLHZHG� DV� KDYLQJ� D�V WURQJ� FDSDFLW\� WR�PHHW� WKHLU� QHDU�WHUP� REOLJDWLRQV��:KHQ� DQ�L QVXUHU� UDWHG� LQ� WKLV�UDWLQJ� FDWHJRU\� LV� GHVLJQDWHG� ZLWK� D�� ��� VLJQ�� LW� LV� YLHZHG� DV� KDYLQJ� D�Y HU\� VWURQJ� FDSDFLW\� WR� PHHW� QHDU�WHUP�REOLJDWLRQV���F2 ,QVXUHUV�DUH�YLHZHG�DV�KDYLQJ�D�JRRG�FDSDFLW\�WR�PHHW�WKHLU�QHDU�WHUP�REOLJDWLRQV���F3 ,QVXUHUV�DUH�YLHZHG�DV�KDYLQJ�DQ�DGHTXDWH�FDSDFLW\�WR�PHHW�WKHLU�QHDU�WHUP�REOLJDWLRQV�� ��B ,QVXUHUV�DUH�YLHZHG�DV�KDYLQJ�D�ZHDN�FDSDFLW\�WR�PHHW�WKHLU�QHDU�WHUP�REOLJDWLRQV���C ,QVXUHUV�DUH�YLHZHG�DV�KDYLQJ�D�YHU\�ZHDN�FDSDFLW\�WR�PHHW�WKHLU�QHDU�WHUP�REOLJDWLRQV���

Page 32: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$����� 1DWLRQDO�5DWLQJV�$������1DWLRQDO�&UHGLW�5DWLQJV�)RU�WKRVH�FRXQWULHV�LQ�ZKLFK�IRUHLJQ�DQG�ORFDO�FXUUHQF\�VRYHUHLJQ�UDWLQJV�DUH�EHORZ�µ$$$¶��DQG�ZKHUH�WKHUH�LV�GHPDQG�IRU�VXFK�UDWLQJV��)LWFK�5DWLQJV�ZLOO�SURYLGH�1DWLRQDO�5DWLQJV��,W� LV� LPSRUWDQW� WR�QRWH�WKDW�HDFK�1DWLRQDO�5DWLQJ�VFDOH� LV�XQLTXH�DQG�LV�GHILQHG�WR�VHUYH�WKH�QHHGV�RI�WKH�ORFDO�PDUNHW�LQ�TXHVWLRQ���7KH�1DWLRQDO�5DWLQJ� VFDOH� SURYLGHV� D�U HODWLYH�PHDVXUH� RI� FUHGLWZRUWKLQHVV� IRU� UDWHG� HQWLWLHV� RQO\� ZLWKLQ� WKH� FRXQWU\�FRQFHUQHG��8QGHU� WKLV� UDWLQJ�VFDOH�� DQ� µ$$$¶� /RQJ�7HUP�1DWLRQDO�5DWLQJ�ZLOO� EH�DVVLJQHG� WR� WKH� ORZHVW� UHODWLYH� ULVN�ZLWKLQ�WKDW�FRXQWU\��ZKLFK��LQ�PRVW�EXW�QRW�DOO�FDVHV��ZLOO�EH�WKH�VRYHUHLJQ�VWDWH����7KH�1DWLRQDO�5DWLQJ�VFDOH�PHUHO\� UDQNV� WKH�GHJUHH�RI�SHUFHLYHG� ULVN� UHODWLYH� WR� WKH� ORZHVW�GHIDXOW� ULVN� LQ� WKDW� VDPH�FRXQWU\��/LNH�ORFDO�FXUUHQF\�UDWLQJV��1DWLRQDO�5DWLQJV�H[FOXGH�WKH�HIIHFWV�RI�VRYHUHLJQ�DQG�WUDQVIHU�ULVN�DQG�H[FOXGH�WKH�SRVVLELOLW\�WKDW�LQYHVWRUV�PD\�EH�XQDEOH�WR�UHSDWULDWH�DQ\�GXH�LQWHUHVW�DQG�SULQFLSDO�UHSD\PHQWV��,W�LV�QRW�UHODWHG�WR�WKH�UDWLQJ� VFDOH� RI� DQ\� RWKHU� QDWLRQDO�PDUNHW�� &RPSDULVRQV� EHWZHHQ� GLIIHUHQW� QDWLRQDO� VFDOHV� RU� EHWZHHQ� DQ� LQGLYLGXDO�QDWLRQDO�VFDOH�DQG�WKH� LQWHUQDWLRQDO�UDWLQJ�VFDOH�DUH�WKHUHIRUH� LQDSSURSULDWH�DQG�SRWHQWLDOO\�PLVOHDGLQJ��&RQVHTXHQWO\�WKH\� DUH� LGHQWLILHG� E\� WKH� DGGLWLRQ� RI� D�V SHFLDO� LGHQWLILHU� IRU� WKH� FRXQWU\� FRQFHUQHG�� VXFK� DV� µ$$$�DUJ�¶� IRU�1DWLRQDO�5DWLQJV�LQ�$UJHQWLQD���,Q�FHUWDLQ�FRXQWULHV��UHJXODWRUV�KDYH�HVWDEOLVKHG�FUHGLW�UDWLQJ�VFDOHV�� WR�EH�XVHG�ZLWKLQ�WKHLU�GRPHVWLF�PDUNHWV��XVLQJ�VSHFLILF�QRPHQFODWXUH��,Q�WKHVH�FRXQWULHV��WKH�DJHQF\¶V�1DWLRQDO�5DWLQJ�GHILQLWLRQV�PD\�EH�VXEVWLWXWHG�E\�WKH�UHJXODWRU\�VFDOHV�� � )RU� LQVWDQFH� )LWFK¶V� 1DWLRQDO� 6KRUW� 7HUP� 5DWLQJV� RI� µ)���[[[�¶�� µ)��[[[�¶�� µ)��[[[�¶� DQG� µ)��[[[�¶� PD\� EH�VXEVWLWXWHG�E\�WKH�UHJXODWRU\�VFDOHV��H�J��µ$��¶��µ$�¶��µ$�¶�DQG�µ$�¶��7KH�EHORZ�GHILQLWLRQV�WKXV�VHUYH�DV�D�WHPSODWH��EXW�XVHUV� VKRXOG� FRQVXOW� WKH� LQGLYLGXDO� VFDOHV� IRU� HDFK� FRXQWU\� OLVWHG� RQ� )LWFK¶V� UHJLRQDO� ZHEVLWHV� WR� GHWHUPLQH� LI� DQ\�DGGLWLRQDO�RU�DOWHUQDWLYH�FDWHJRU\�GHILQLWLRQV�DSSO\���

/LPLWDWLRQV�RI�WKH�1DWLRQDO�5DWLQJ�6FDOH�6SHFLILF�OLPLWDWLRQV�UHOHYDQW�WR�WKH�1DWLRQDO�UDWLQJ�VFDOH�LQFOXGH��x� 1DWLRQDO�VFDOH�UDWLQJV�DUH�RQO\�DYDLODEOH�LQ�VHOHFWHG�FRXQWULHV��x� 1DWLRQDO� VFDOH� UDWLQJV� DUH� RQO\� GLUHFWO\� FRPSDUDEOH� ZLWK� RWKHU� QDWLRQDO� UDWLQJV� LQ� WKH� VDPH� FRXQWU\�� 7KHUH� LV� D�

FHUWDLQ�FRUUHODWLRQ�EHWZHHQ�QDWLRQDO�DQG�JOREDO� UDWLQJV�EXW� WKHUH� LV�QRW�D�SUHFLVH� WUDQVODWLRQ�EHWZHHQ� WKH�VFDOHV��7KH�LPSOLHG�SUREDELOLW\�RI�GHIDXOW�RI�D�JLYHQ�QDWLRQDO�VFDOH�UDWLQJ�ZLOO�YDU\�RYHU�WLPH��

x� 7KH�YDOXH�RI�GHIDXOW�VWXGLHV�IRU�QDWLRQDO�UDWLQJV�FDQ�EH�OLPLWHG��'XH�WR�WKH�UHODWLYH�QDWXUH�RI�QDWLRQDO�VFDOHV��D�JLYHQ�QDWLRQDO� VFDOH� UDWLQJ� LV�QRW� LQWHQGHG� WR� UHSUHVHQW�D�I L[HG�DPRXQW�RI� GHIDXOW� ULVN�RYHU� WLPH��$V�D�U HVXOW�� D�GHIDXOW�VWXG\�XVLQJ�RQO\�QDWLRQDO�UDWLQJV�PD\�QRW�JLYH�DQ�DFFXUDWH�SLFWXUH�RI�WKH�KLVWRULFDO�UHODWLRQVKLS�EHWZHHQ�UDWLQJV�DQG�GHIDXOW�ULVN���8VHUV�VKRXOG�H[HUFLVH�FDXWLRQ�LI�WKH\�ZLVK�WR�LQIHU�IXWXUH�GHIDXOW�SUREDELOLWLHV�IRU�QDWLRQDO�VFDOH�UDWLQJV�XVLQJ� WKH� KLVWRULFDO� GHIDXOW� H[SHULHQFH� ZLWK� LQWHUQDWLRQDO� UDWLQJV� DQG� PDSSLQJ� WDEOHV� WR� OLQN� WKH� QDWLRQDO� DQG�LQWHUQDWLRQDO�UDWLQJV��$V�ZLWK�UDWLQJV�RQ�DQ\�VFDOH��WKH�IXWXUH�ZLOO�QRW�QHFHVVDULO\�IROORZ�WKH�SDVW��

y� �)LWFK�DWWDFKHV�OHVV�FRQILGHQFH�WR�FRQFOXVLRQV�DERXW�QDWLRQDO�VFDOH�GHIDXOW�SUREDELOLWLHV�WKDQ�IRU�,QWHUQDWLRQDO�&UHGLW�UDWLQJV��7KHUH�KDV�QRW�EHHQ�D�FRPSUHKHQVLYH�JOREDO�VWXG\�RI�GHIDXOW�KLVWRU\�DPRQJ�HQWLWLHV�ZLWK�QDWLRQDO�VFDOHV�WR�VKRZ�WKDW�WKHLU�H[�SRVW�GHIDXOW�H[SHULHQFH�KDV�EHHQ�FRQVLVWHQW�ZLWK�H[�DQWH�SUREDELOLWLHV�LPSOLHG��7KLV�LV�GXH�WR�WKH�UHODWLYHO\�VKRUW�KLVWRU\�RI�UDWLQJV�LQ�HPHUJLQJ�PDUNHWV�DQG�WKH�UHVWULFWLYH�UHODWLYH�QDWXUH�RI�WKH�QDWLRQDO�VFDOHV��

�7KH�DERYH� OLVW� LV�QRW�H[KDXVWLYH��DQG� LV�SURYLGHG�IRU� WKH�UHDGHU¶V�FRQYHQLHQFH��5HDGHUV�DUH�UHTXHVWHG� WR� UHYLHZ�WKH�VHFWLRQ�Understanding Credit Ratings - Limitations and Usage�IRU�IXUWKHU�LQIRUPDWLRQ�RQ�WKH�OLPLWDWLRQV�RI�WKH�DJHQF\¶V�UDWLQJV��

Page 33: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$������1DWLRQDO�/RQJ�7HUP�&UHGLW�5DWLQJV�AAA(xxx) µ$$$¶�1DWLRQDO�5DWLQJV�GHQRWH�WKH�KLJKHVW�UDWLQJ�DVVLJQHG�E\�WKH�DJHQF\�LQ�LWV�1DWLRQDO�5DWLQJ�VFDOH�IRU�WKDW�FRXQWU\��7KLV�UDWLQJ�LV�DVVLJQHG�WR�LVVXHUV�RU�REOLJDWLRQV�ZLWK�WKH�ORZHVW�H[SHFWDWLRQ�RI�GHIDXOW�ULVN�UHODWLYH�WR�DOO�RWKHU�LVVXHUV�RU�REOLJDWLRQV�LQ�WKH�VDPH�FRXQWU\����AA(xxx) µ$$¶�1DWLRQDO�5DWLQJV�GHQRWH�H[SHFWDWLRQV�RI�YHU\� ORZ�GHIDXOW�ULVN�UHODWLYH�WR�RWKHU� LVVXHUV�RU�REOLJDWLRQV� LQ� WKH�VDPH�FRXQWU\��7KH�GHIDXOW�ULVN�LQKHUHQW�GLIIHUV�RQO\�VOLJKWO\�IURP�WKDW�RI�WKH�FRXQWU\¶V�KLJKHVW�UDWHG�LVVXHUV�RU�REOLJDWLRQV���A(xxx) µ$¶�1DWLRQDO�5DWLQJV�GHQRWH�H[SHFWDWLRQV�RI�ORZ�GHIDXOW�ULVN�UHODWLYH�WR�RWKHU�LVVXHUV�RU�REOLJDWLRQV�LQ�WKH�VDPH�FRXQWU\��+RZHYHU��FKDQJHV�LQ�FLUFXPVWDQFHV�RU�HFRQRPLF�FRQGLWLRQV�PD\�DIIHFW�WKH�FDSDFLW\�IRU�WLPHO\�UHSD\PHQW�WR�D�JUHDWHU�GHJUHH�WKDQ�LV�WKH�FDVH�IRU�ILQDQFLDO�FRPPLWPHQWV�GHQRWHG�E\�D�KLJKHU�UDWHG�FDWHJRU\���BBB(xxx) µ%%%¶� 1DWLRQDO� 5DWLQJV� GHQRWH� D�P RGHUDWH� GHIDXOW� ULVN� UHODWLYH� WR� RWKHU� LVVXHUV� RU� REOLJDWLRQV� LQ� WKH� VDPH� FRXQWU\��+RZHYHU��FKDQJHV�LQ�FLUFXPVWDQFHV�RU�HFRQRPLF�FRQGLWLRQV�DUH�PRUH�OLNHO\�WR�DIIHFW�WKH�FDSDFLW\�IRU�WLPHO\�UHSD\PHQW�WKDQ�LV�WKH�FDVH�IRU�ILQDQFLDO�FRPPLWPHQWV�GHQRWHG�E\�D�KLJKHU�UDWHG�FDWHJRU\���BB(xxx) µ%%¶�1DWLRQDO�5DWLQJV�GHQRWH�DQ�HOHYDWHG�GHIDXOW�ULVN�UHODWLYH�WR�RWKHU�LVVXHUV�RU�REOLJDWLRQV�LQ�WKH�VDPH�FRXQWU\��:LWKLQ�WKH� FRQWH[W� RI� WKH� FRXQWU\�� SD\PHQW� LV� XQFHUWDLQ� WR� VRPH� GHJUHH� DQG� FDSDFLW\� IRU� WLPHO\� UHSD\PHQW� UHPDLQV�PRUH�YXOQHUDEOH�WR�DGYHUVH�HFRQRPLF�FKDQJH�RYHU�WLPH����B(xxx) µ%¶� 1DWLRQDO� 5DWLQJV� GHQRWH� D�V LJQLILFDQWO\� HOHYDWHG� GHIDXOW� ULVN� UHODWLYH� WR� RWKHU� LVVXHUV� RU� REOLJDWLRQV� LQ� WKH� VDPH�FRXQWU\�� )LQDQFLDO� FRPPLWPHQWV� DUH� FXUUHQWO\� EHLQJ� PHW� EXW� D� OLPLWHG� PDUJLQ� RI� VDIHW\� UHPDLQV� DQG� FDSDFLW\� IRU�FRQWLQXHG� WLPHO\� SD\PHQWV� LV� FRQWLQJHQW� XSRQ� D� VXVWDLQHG�� IDYRUDEOH� EXVLQHVV� DQG� HFRQRPLF� HQYLURQPHQW�� )RU�LQGLYLGXDO� REOLJDWLRQV�� WKLV� UDWLQJ� PD\� LQGLFDWH� GLVWUHVVHG� RU� GHIDXOWHG� REOLJDWLRQV� ZLWK� SRWHQWLDO� IRU� H[WUHPHO\� KLJK�UHFRYHULHV����CCC(xxx) µ&&&¶�1DWLRQDO�5DWLQJV�GHQRWH� WKDW�GHIDXOW� LV�D� UHDO�SRVVLELOLW\��&DSDFLW\� IRU�PHHWLQJ� ILQDQFLDO�FRPPLWPHQWV� LV�VROHO\�UHOLDQW�XSRQ�VXVWDLQHG��IDYRUDEOH�EXVLQHVV�RU�HFRQRPLF�FRQGLWLRQV����CC(xxx) µ&&¶�1DWLRQDO�5DWLQJV�GHQRWH�WKDW�GHIDXOW�RI�VRPH�NLQG�DSSHDUV�SUREDEOH����C(xxx) µ&¶�1DWLRQDO�5DWLQJV�GHQRWH�WKDW�GHIDXOW�LV�LPPLQHQW����RD(xxx): Restricted default. µ5'¶�UDWLQJV�LQGLFDWH�DQ�LVVXHU�WKDW�LQ�)LWFK�5DWLQJV¶�RSLQLRQ�KDV�H[SHULHQFHG�DQ�XQFXUHG�SD\PHQW�GHIDXOW�RQ�D�ERQG��ORDQ�RU�RWKHU�PDWHULDO�ILQDQFLDO�REOLJDWLRQ�EXW�ZKLFK�KDV�QRW�HQWHUHG�LQWR�EDQNUXSWF\�ILOLQJV��DGPLQLVWUDWLRQ��UHFHLYHUVKLS��OLTXLGDWLRQ�RU�RWKHU�IRUPDO�ZLQGLQJ�XS�SURFHGXUH��DQG�ZKLFK�KDV�QRW�RWKHUZLVH�FHDVHG�EXVLQHVV��7KLV�ZRXOG�LQFOXGH��D��WKH�VHOHFWLYH�SD\PHQW�GHIDXOW�RQ�D�VSHFLILF�FODVV�RU�FXUUHQF\�RI�GHEW��E��WKH�XQFXUHG�H[SLU\�RI�DQ\�DSSOLFDEOH�JUDFH�SHULRG��FXUH�SHULRG�RU�GHIDXOW�IRUEHDUDQFH�SHULRG�IROORZLQJ�D�SD\PHQW�GHIDXOW�RQ�D�EDQN�ORDQ��FDSLWDO�PDUNHWV�VHFXULW\�RU�RWKHU�PDWHULDO�ILQDQFLDO�REOLJDWLRQ��

Page 34: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

F��WKH�H[WHQVLRQ�RI�PXOWLSOH�ZDLYHUV�RU�IRUEHDUDQFH�SHULRGV�XSRQ�D�SD\PHQW�GHIDXOW�RQ�RQH�RU�PRUH�PDWHULDO�ILQDQFLDO�REOLJDWLRQV��HLWKHU�LQ�VHULHV�RU�LQ�SDUDOOHO��RU�G��H[HFXWLRQ�RI�D�GLVWUHVVHG�GHEW�H[FKDQJH�RQ�RQH�RU�PRUH�PDWHULDO�ILQDQFLDO�REOLJDWLRQV��

��D(xxx) µ'¶�1DWLRQDO�5DWLQJV�GHQRWH�DQ�LVVXHU�RU�LQVWUXPHQW�WKDW�LV�FXUUHQWO\�LQ�GHIDXOW���

Page 35: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$�����1DWLRQDO�6KRUW�7HUP�&UHGLW�5DWLQJV�F1(xxx) ,QGLFDWHV�WKH�VWURQJHVW�FDSDFLW\�IRU�WLPHO\�SD\PHQW�RI�ILQDQFLDO�FRPPLWPHQWV�UHODWLYH�WR�RWKHU�LVVXHUV�RU�REOLJDWLRQV�LQ�WKH�VDPH�FRXQWU\��8QGHU�WKH�DJHQF\¶V�1DWLRQDO�5DWLQJ�VFDOH��WKLV�UDWLQJ�LV�DVVLJQHG�WR�WKH�ORZHVW�GHIDXOW�ULVN�UHODWLYH�WR�RWKHUV�LQ�WKH�VDPH�FRXQWU\��:KHUH�WKH�OLTXLGLW\�SURILOH�LV�SDUWLFXODUO\�VWURQJ��D�³�´�LV�DGGHG�WR�WKH�DVVLJQHG�UDWLQJ���F2(xxx) ,QGLFDWHV�D�JRRG �FDSDFLW\� IRU� WLPHO\�SD\PHQW�RI� ILQDQFLDO� FRPPLWPHQWV� UHODWLYH� WR�RWKHU� LVVXHUV�RU�REOLJDWLRQV� LQ� WKH�VDPH�FRXQWU\��+RZHYHU��WKH�PDUJLQ�RI�VDIHW\�LV�QRW�DV�JUHDW�DV�LQ�WKH�FDVH�RI�WKH�KLJKHU�UDWLQJV����F3(xxx) ,QGLFDWHV�DQ�DGHTXDWH�FDSDFLW\�IRU�WLPHO\�SD\PHQW�RI�ILQDQFLDO�FRPPLWPHQWV�UHODWLYH�WR�RWKHU� LVVXHUV�RU�REOLJDWLRQV�LQ�WKH� VDPH� FRXQWU\�� +RZHYHU�� VXFK� FDSDFLW\� LV� PRUH� VXVFHSWLEOH� WR� QHDU�WHUP� DGYHUVH� FKDQJHV� WKDQ� IRU� ILQDQFLDO�FRPPLWPHQWV�LQ�KLJKHU�UDWHG�FDWHJRULHV���B(xxx) ,QGLFDWHV�DQ�XQFHUWDLQ�FDSDFLW\�IRU�WLPHO\�SD\PHQW�RI�ILQDQFLDO�FRPPLWPHQWV�UHODWLYH�WR�RWKHU�LVVXHUV�RU�REOLJDWLRQV�LQ�WKH� VDPH� FRXQWU\�� 6XFK� FDSDFLW\� LV� KLJKO\� VXVFHSWLEOH� WR� QHDU�WHUP� DGYHUVH� FKDQJHV� LQ� ILQDQFLDO� DQG� HFRQRPLF�FRQGLWLRQV���C(xxx) ,QGLFDWHV�D�KLJKO\�XQFHUWDLQ�FDSDFLW\�IRU�WLPHO\�SD\PHQW�RI�ILQDQFLDO�FRPPLWPHQWV�UHODWLYH�WR�RWKHU�LVVXHUV�RU�REOLJDWLRQV�LQ�WKH�VDPH�FRXQWU\��&DSDFLW\�IRU�PHHWLQJ�ILQDQFLDO�FRPPLWPHQWV�LV�VROHO\�UHOLDQW�XSRQ�D�VXVWDLQHG��IDYRUDEOH�EXVLQHVV�DQG�HFRQRPLF�HQYLURQPHQW���RD(xxx): Restricted default. ,QGLFDWHV�DQ�HQWLW\�WKDW�KDV�GHIDXOWHG�RQ�RQH�RU�PRUH�RI�LWV�ILQDQFLDO�FRPPLWPHQWV��DOWKRXJK�LW�FRQWLQXHV�WR�PHHW�RWKHU�ILQDQFLDO�REOLJDWLRQV��$SSOLFDEOH�WR�HQWLW\�UDWLQJV�RQO\����D (xxx) ,QGLFDWHV�DFWXDO�RU�LPPLQHQW�SD\PHQW�GHIDXOW����Notes to Long-Term and Short-Term National Ratings: The ISO International Country Code is placed in parentheses immediately following the rating letters to indicate the identity of the National market within which the rating applies. For illustrative purposes, (xxx) has been used. “+” or “-” may be appended to a National Rating to denote relative status within a major rating category. Such suffixes are not added to the ‘AAA(xxx)’ Long-Term National Rating category, to categories below ‘CCC(xxx)’, or to Short-Term National Ratings other than ‘F1(xxx)’. �

Page 36: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$�����1DWLRQDO�,QVXUHU�)LQDQFLDO�6WUHQJWK�5DWLQJV�1DWLRQDO� ,)6�5DWLQJV�VHUYH� WKH�QHHGV�RI� ORFDO� LQVXUDQFH�PDUNHWV��1DWLRQDO� ,)6�5DWLQJV�DUH�DVVLJQHG� WR�DQ� LQVXUHU¶V�SROLF\KROGHU�REOLJDWLRQV�DQG�DUH�DQ�DVVHVVPHQW�RI�UHODWLYH�ILQDQFLDO�VWUHQJWK��&RQVLVWHQW�ZLWK�RWKHU� IRUPV�RI�1DWLRQDO�5DWLQJV�DVVLJQHG�E\�WKH�DJHQF\��1DWLRQDO�,)6�5DWLQJV�DVVHVV�WKH�DELOLW\�RI�DQ�LQVXUHU�WR�PHHW�SROLF\KROGHU�DQG�UHODWHG�REOLJDWLRQV��UHODWLYH�WR�WKH�³EHVW´�FUHGLW�ULVN�LQ�D�JLYHQ�FRXQWU\�DFURVV�DOO�LQGXVWULHV�DQG�REOLJDWLRQ�W\SHV��&RPSDULVRQV�EHWZHHQ�GLIIHUHQW�FRXQWULHV¶�1DWLRQDO� ,)6�5DWLQJ�VFDOHV�RU�EHWZHHQ�DQ� LQGLYLGXDO�FRXQWU\¶V�1DWLRQDO� ,)6�5DWLQJ�VFDOH�DQG�WKH�,QWHUQDWLRQDO�,)6�5DWLQJ�VFDOH�DUH�LQDSSURSULDWH��1DWLRQDO�,)6�5DWLQJV�DUH�RQO\�DVVLJQHG�XVLQJ�WKH�/RQJ�7HUP�VFDOH��DV�GHILQHG�EHORZ���AAA(xxx) µ$$$¶�1DWLRQDO�,)6�5DWLQJV�GHQRWH�WKH�KLJKHVW�UDWLQJ�DVVLJQHG�ZLWKLQ�WKH�QDWLRQDO�VFDOH�IRU�WKDW�FRXQWU\��7KH�UDWLQJ�LV�DVVLJQHG� WR� WKH� SROLF\KROGHU� REOLJDWLRQV� RI� WKH� LQVXUDQFH� HQWLWLHV� ZLWK� WKH� ORZHVW� FUHGLW� ULVN� UHODWLYH� WR� DOO� RWKHU�REOLJDWLRQV�RU�LVVXHUV�LQ�WKH�VDPH�FRXQWU\��DFURVV�DOO�LQGXVWULHV�DQG�REOLJDWLRQ�W\SHV���AA(xxx) µ$$¶�1DWLRQDO�,)6�5DWLQJV�GHQRWH�D�YHU\�VWURQJ�FDSDFLW\�WR�PHHW�SROLF\KROGHU�REOLJDWLRQV�UHODWLYH�WR�DOO�RWKHU�REOLJDWLRQV�RU�LVVXHUV�LQ�WKH�VDPH�FRXQWU\��DFURVV�DOO� LQGXVWULHV�DQG�REOLJDWLRQ�W\SHV��7KH�ULVN�RI�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV�GLIIHUV�RQO\�VOLJKWO\�IURP�WKH�FRXQWU\¶V�KLJKHVW�UDWHG�REOLJDWLRQV�RU�LVVXHUV���A(xxx) µ$¶�1DWLRQDO� ,)6�5DWLQJV�GHQRWH�D�V WURQJ�FDSDFLW\� WR�PHHW�SROLF\KROGHU�REOLJDWLRQV� UHODWLYH� WR�DOO�RWKHU�REOLJDWLRQV�RU�LVVXHUV� LQ� WKH� VDPH� FRXQWU\�� DFURVV� DOO� LQGXVWULHV� DQG�R EOLJDWLRQ� W\SHV�� +RZHYHU�� FKDQJHV� LQ� FLUFXPVWDQFHV� RU�HFRQRPLF� FRQGLWLRQV� PD\� DIIHFW� WKH� FDSDFLW\� IRU� SD\PHQW� RI� SROLF\KROGHU� REOLJDWLRQV� WR� D�JU HDWHU� GHJUHH� WKDQ� IRU�ILQDQFLDO�FRPPLWPHQWV�GHQRWHG�E\�D�KLJKHU�UDWHG�FDWHJRU\���BBB(xxx) µ%%%¶� 1DWLRQDO� ,)6� 5DWLQJV� GHQRWH� DQ� DGHTXDWH� FDSDFLW\� WR� PHHW� SROLF\KROGHU� REOLJDWLRQV� UHODWLYH� WR� DOO� RWKHU�REOLJDWLRQV� RU� LVVXHUV� LQ� WKH� VDPH� FRXQWU\�� DFURVV� DOO� LQGXVWULHV� DQG�R EOLJDWLRQ� W\SHV�� +RZHYHU�� FKDQJHV� LQ�FLUFXPVWDQFHV�RU�HFRQRPLF�FRQGLWLRQV�DUH�PRUH�OLNHO\�WR�DIIHFW�WKH�FDSDFLW\�IRU�SD\PHQW�RI�SROLF\KROGHU�REOLJDWLRQV�WKDQ�IRU�ILQDQFLDO�FRPPLWPHQWV�GHQRWHG�E\�D�KLJKHU�UDWHG�FDWHJRU\���BB(xxx) µ%%¶�1DWLRQDO�,)6�5DWLQJV�GHQRWH�D�IDLUO\�ZHDN�FDSDFLW\�WR�PHHW�SROLF\KROGHU�REOLJDWLRQV�UHODWLYH�WR�DOO�RWKHU�REOLJDWLRQV�RU�LVVXHUV�LQ�WKH�VDPH�FRXQWU\��DFURVV�DOO�LQGXVWULHV�DQG�REOLJDWLRQ�W\SHV��:LWKLQ�WKH�FRQWH[W�RI�WKH�FRXQWU\��SD\PHQW�RI�WKHVH� SROLF\KROGHU� REOLJDWLRQV� LV� XQFHUWDLQ� WR� VRPH� GHJUHH� DQG� FDSDFLW\� IRU� SD\PHQW� UHPDLQV� PRUH� YXOQHUDEOH� WR�DGYHUVH�HFRQRPLF�FKDQJH�RYHU�WLPH���B(xxx) µ%¶�1DWLRQDO�,)6�5DWLQJV�GHQRWH�WZR�SRVVLEOH�RXWFRPHV��,I�SROLF\KROGHU�REOLJDWLRQV�DUH�VWLOO�EHLQJ�PHW�RQ�D�WLPHO\�EDVLV��WKH�UDWLQJ�LPSOLHV�D�VLJQLILFDQWO\�ZHDN�FDSDFLW\�WR�FRQWLQXH�WR�PHHW�SROLF\KROGHU�REOLJDWLRQV�UHODWLYH�WR�DOO�RWKHU�LVVXHV�RU�LVVXHUV�LQ�WKH�VDPH�FRXQWU\��DFURVV�DOO�LQGXVWULHV�DQG�REOLJDWLRQ�W\SHV��$�OLPLWHG�PDUJLQ�RI�VDIHW\�UHPDLQV�DQG�FDSDFLW\�IRU�FRQWLQXHG�SD\PHQWV�LV�FRQWLQJHQW�XSRQ�D�VXVWDLQHG��IDYRUDEOH�EXVLQHVV�DQG�HFRQRPLF�HQYLURQPHQW��$OWHUQDWLYHO\��D�µ%¶�1DWLRQDO�,)6�5DWLQJ�LV�DVVLJQHG�WR�REOLJDWLRQV�WKDW�KDYH�H[SHULHQFHG�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV��EXW�ZLWK�WKH�SRWHQWLDO�IRU�H[WUHPHO\�KLJK�UHFRYHULHV���CCC(xxx) µ&&&¶�1DWLRQDO� ,)6�5DWLQJV�GHQRWH� WZR�SRVVLEOH�RXWFRPHV�� ,I�SROLF\KROGHU�REOLJDWLRQV�DUH�VWLOO�EHLQJ�PHW�RQ�D� WLPHO\�EDVLV�� WKH� UDWLQJ� LPSOLHV� FHDVHG� RU� LQWHUUXSWHG� SD\PHQWV� DUH� D� UHDO� SRVVLELOLW\�� &DSDFLW\� IRU� FRQWLQXHG� SD\PHQWV� LV�FRQWLQJHQW�XSRQ�D�VXVWDLQHG��IDYRUDEOH�EXVLQHVV�DQG�HFRQRPLF�HQYLURQPHQW��$OWHUQDWLYHO\��D�µ&&&¶�1DWLRQDO�,)6�5DWLQJ�

Page 37: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

LV�DVVLJQHG�WR�REOLJDWLRQV�WKDW�KDYH�H[SHULHQFHG�FHDVHG�RU� LQWHUUXSWHG�SD\PHQWV��EXW�ZLWK�WKH�SRWHQWLDO� IRU�YHU\�KLJK�UHFRYHULHV���CC(xxx) µ&&¶�1DWLRQDO�,)6�5DWLQJV�GHQRWH�WZR�SRVVLEOH�RXWFRPHV��,I�SROLF\KROGHU�REOLJDWLRQV�DUH�VWLOO�EHLQJ�PHW�RQ�D�WLPHO\�EDVLV��WKH�UDWLQJ�LPSOLHV�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV�DSSHDU�SUREDEOH��$OWHUQDWLYHO\��D�µ&&¶�1DWLRQDO�,)6�5DWLQJ�LV�DVVLJQHG�WR�REOLJDWLRQV�WKDW�KDYH�H[SHULHQFHG�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV��EXW�ZLWK�WKH�SRWHQWLDO�IRU�DYHUDJH�WR�EHORZ�DYHUDJH�UHFRYHULHV���‘C’(xxx) µ&¶�1DWLRQDO�,)6�5DWLQJV�GHQRWH�WZR�SRVVLEOH�RXWFRPHV��,I�SROLF\KROGHU�REOLJDWLRQV�DUH�VWLOO�EHLQJ�PHW�RQ�D�WLPHO\�EDVLV��WKH�UDWLQJ� LPSOLHV� FHDVHG� RU� LQWHUUXSWHG� SD\PHQWV� DUH� LPPLQHQW�� $OWHUQDWLYHO\�� D� µ&¶� 1DWLRQDO� ,)6� 5DWLQJ� LV� DVVLJQHG� WR�REOLJDWLRQV�WKDW�KDYH�H[SHULHQFHG�FHDVHG�RU�LQWHUUXSWHG�SD\PHQWV�ZLWK�WKH�SRWHQWLDO�IRU�EHORZ�DYHUDJH�WR�SRRU�UHFRYHULHV���Notes: “+” or “-” are used with a rating symbol to indicate the relative position of a credit within the rating category. They are not used for the ‘AAA’ category or for ratings below the ‘CCC’ category. The ISO International Code is placed in parentheses immediately following the rating letters to indicate the identity of the National market within which the rating applies. For illustrative purposes, (xxx) has been used. ���

Page 38: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$��� &RXQWU\�&HLOLQJV� &RXQWU\�&HLOLQJV� DUH� H[SUHVVHG� XVLQJ� WKH� V\PEROV� RI� WKH� ORQJ�WHUP� LVVXHU� VFDOH� GHVFULEHG� LQ� $������� DQG� UHODWH� WR�VRYHUHLJQ� MXULVGLFWLRQV� DOVR� UDWHG� E\� )LWFK� 5DWLQJV� RQ� WKH� ,VVXHU� 'HIDXOW� 5DWLQJ� VFDOH�� 7KH\� UHIOHFW� WKH� DJHQF\¶V�MXGJPHQW� UHJDUGLQJ� WKH� ULVN�RI�FDSLWDO�DQG�H[FKDQJH�FRQWUROV�EHLQJ� LPSRVHG�E\� WKH�VRYHUHLJQ�DXWKRULWLHV� WKDW�ZRXOG�SUHYHQW�RU�PDWHULDOO\�LPSHGH�WKH�SULYDWH�VHFWRU¶V�DELOLW\�WR�FRQYHUW� ORFDO�FXUUHQF\�LQWR�IRUHLJQ�FXUUHQF\�DQG�WUDQVIHU�WR�QRQ�UHVLGHQW� FUHGLWRUV� �� WUDQVIHU� DQG�F RQYHUWLELOLW\� �7&�� ULVN�� $V� VXFK�� WKH\� DUH� QRW� UDWLQJV�� EXW� H[SUHVVLRQV� RI� D�PD[LPXP�OLPLW�IRU�WKH�IRUHLJQ�FXUUHQF\�LVVXHU�UDWLQJV�RI�PRVW��EXW�QRW�DOO��LVVXHUV�LQ�D�JLYHQ�FRXQWU\���*LYHQ�WKH�FORVH�FRUUHODWLRQ�EHWZHHQ�VRYHUHLJQ�FUHGLW�DQG�7&�ULVNV��WKH�&RXQWU\�&HLOLQJ�PD\�H[KLELW�D�JUHDWHU�GHJUHH�RI�YRODWLOLW\�WKDQ�ZRXOG�QRUPDOO\�EH�H[SHFWHG�ZKHQ�LW�OLHV�DERYH�WKH�VRYHUHLJQ�IRUHLJQ�FXUUHQF\�UDWLQJ��

Page 39: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$��� $GGLWLRQDO�8VDJH�RI�3ULPDU\�&UHGLW�5DWLQJ�6FDOHV�$�����([SHFWHG�5DWLQJV�:KHUH� D�U DWLQJ� LV� UHIHUUHG� WR� DV� ³H[SHFWHG´�� DOWHUQDWLYHO\� UHIHUUHG� WR� DV� ³H[SHFWV� WR� UDWH´� RU� VXIIL[HG� DV� �(;3��� WKLV�LQGLFDWHV� WKDW�D�I XOO� UDWLQJ� KDV�EHHQ�DVVLJQHG�EDVHG�XSRQ� WKH� DJHQF\¶V�H[SHFWDWLRQV� UHJDUGLQJ� ILQDO� GRFXPHQWDWLRQ��W\SLFDOO\�EDVHG�XSRQ�D�UHYLHZ�RI� WKH� ILQDO�GUDIW�GRFXPHQWDWLRQ�SURYLGHG�E\� WKH� LVVXHU�� ,I� VXFK� ILQDO�GRFXPHQWDWLRQ� LV�UHFHLYHG�DQG� LV�DV�H[SHFWHG�� WKH�H[SHFWHG� UDWLQJ�ZLOO� W\SLFDOO\�EH�FRQYHUWHG� WR�D� ILQDO� UDWLQJ��)LWFK�PD\�DOVR�HPSOR\�µH[SHFWV� WR� UDWH¶� ODQJXDJH� IRU� QHZ� LVVXHUV� �FXUUHQWO\� XQUDWHG�� IRU� UDWLQJV� WKDW� DUH� DVVLJQH� GLQ� WKH� FRXUVH� RI� D�UHVWUXFWXULQJ�� UHILQDQFLQJ� RU� FRUSRUDWH� UHRUJDQL]DWLRQ�� 7KH� µH[SHFWV� WR� UDWH¶� ZLOO� UHIOHFW� DQG�U HIHU� WR� WKH� UDWLQJ� OHYHO�H[SHFWHG�IROORZLQJ� WKH�FRQFOXVLRQ�RI� WKH�SURSRVHG�RSHUDWLRQ��GHEW� LVVXDQFH��UHVWUXFWXUH��RU�PHUJHU���:KLOH�H[SHFWHG�UDWLQJV�W\SLFDOO\�FRQYHUW�WR�ILQDO�UDWLQJV�ZLWKLQ�D�VKRUW�WLPH��GHWHUPLQHG�E\��WLPLQJ�RI�WUDQVDFWLRQ�FORVXUH�� LQ�WKH�SHULRG�EHWZHHQ�DVVLJQPHQW�RI�DQ�H[SHFWHG�UDWLQJ�DQG�D� ILQDO� UDWLQJ��H[SHFWHG�UDWLQJV�PD\�EH�UDLVHG�� ORZHUHG�RU�SODFHG�RQ�5DWLQJ�:DWFK�RU�ZLWKGUDZQ��DV�ZLWK�ILQDO�UDWLQJV���

$�����3ULYDWH�5DWLQJV� �)LWFK�5DWLQJV�DOVR�SUHSDUHV�D�OLPLWHG�QXPEHU�RI�SULYDWH�UDWLQJV��IRU�H[DPSOH�IRU�HQWLWLHV�ZLWK�QR�SXEOLFO\�WUDGHG�GHEW��RU�ZKHUH� WKH� UDWLQJ� LV� UHTXLUHG� IRU� LQWHUQDO� EHQFKPDUNLQJ�RU� UHJXODWRU\�SXUSRVHV�� 7KHVH� UDWLQJV�DUH� JHQHUDOO\� SURYLGHG�GLUHFWO\�WR�WKH�UDWHG�HQWLW\��ZKLFK�LV�WKHQ�UHVSRQVLEOH�IRU�HQVXULQJ�WKDW�DQ\�SDUW\�WR�ZKRP�LW�GLVFORVHV�WKH�SULYDWH�UDWLQJ�LV�XSGDWHG�ZKHQ�DQ\�FKDQJH�LQ�WKH�UDWLQJ�RFFXUV���3ULYDWH�UDWLQJV�XQGHUJR�WKH�VDPH�DQDO\VLV��FRPPLWWHH�SURFHVV�DQG�VXUYHLOODQFH�DV�SXEOLVKHG�UDWLQJV��XQOHVV�RWKHUZLVH�GLVFORVHG�DV�³SRLQW�LQ�WLPH´�LQ�QDWXUH��VHH�DERYH����

$�����3URJUDP�5DWLQJV�3URJUDP�UDWLQJV�DVVLJQHG�WR�FRUSRUDWH�DQG�SXEOLF�ILQDQFH�QRWH�LVVXDQFH�SURJUDPV��H�J��PHGLXP�WHUP�QRWH�SURJUDPV��UHODWH�RQO\�WR�VWDQGDUG�LVVXHV�PDGH�XQGHU�WKH�SURJUDP�FRQFHUQHG��LW�VKRXOG�QRW�EH�DVVXPHG�WKDW�WKHVH�UDWLQJV�DSSO\�WR�HYHU\�LVVXH�PDGH�XQGHU�WKH�SURJUDP��

$�����³,QWHUHVW�2QO\´�5DWLQJV�,QWHUHVW�RQO\�UDWLQJV�DUH�DVVLJQHG�WR�LQWHUHVW�VWULSV��7KHVH�UDWLQJV�GR�QRW�DGGUHVV�WKH�SRVVLELOLW\�WKDW�D�VHFXULW\�KROGHU�PLJKW�IDLO�WR�UHFRYHU�VRPH�RU�DOO�RI�LWV�LQLWLDO�LQYHVWPHQW�GXH�WR�YROXQWDU\�RU�LQYROXQWDU\�SULQFLSDO�UHSD\PHQWV���

$�����³3ULQFLSDO�2QO\´�5DWLQJV�3ULQFLSDO�RQO\� UDWLQJV� DGGUHVV� WKH� OLNHOLKRRG� WKDW� D�V HFXULW\� KROGHU� ZLOO� UHFHLYH� LWV� LQLWLDO� SULQFLSDO� LQYHVWPHQW� HLWKHU�EHIRUH�RU�E\�WKH�VFKHGXOHG�PDWXULW\�GDWH����

$�����³5DWH�RI�5HWXUQ´�5DWLQJV�5DWLQJV�DOVR�PD\�EH�DVVLJQHG�WR�JDXJH�WKH�OLNHOLKRRG�RI�DQ�LQYHVWRU�UHFHLYLQJ�D�FHUWDLQ�SUHGHWHUPLQHG�LQWHUQDO�UDWH�RI�UHWXUQ�ZLWKRXW�UHJDUG�WR�WKH�SUHFLVH�WLPLQJ�RI�DQ\�FDVK�IORZV����

Page 40: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

$�����³8QHQKDQFHG´�5DWLQJV�8QHQKDQFHG�UDWLQJV�UHIOHFW�WKH�XQGHUO\LQJ�FUHGLWZRUWKLQHVV�RI�ILQDQFLDO�LQVWUXPHQWV�DEVHQW�DQ\�FUHGLW�HQKDQFHPHQW�WKDW�PD\�EH�SURYLGHG�WKURXJK�ERQG�LQVXUDQFH��ILQDQFLDO�JXDUDQWHHV��GHGLFDWHG�OHWWHUV�RI�FUHGLW��OLTXLGLW\�IDFLOLWLHV��RU�LQWHUFHSW�PHFKDQLVPV�����,Q�VRPH�FDVHV��)LWFK�PD\�FKRRVH�WR�DVVLJQ�DQ�XQHQKDQFHG�UDWLQJ�DORQJ�ZLWK�FUHGLW�UDWLQJ�EDVHG�RQ�HQKDQFHPHQW��7KH�XQHQKDQFHG� UDWLQJ� LQGLFDWHV� WKH�FUHGLWZRUWKLQHVV�RI� WKH� ILQDQFLDO� LQVWUXPHQW�ZLWKRXW� FRQVLGHULQJ�DQ\�EHQHILW� RI� VXFK�HQKDQFHPHQW��)LQDQFLDO�REOLJDWLRQV�PD\�EH�HQKDQFHG�E\�D�JXDUDQWHH�LQVWUXPHQW�SURYLGHG�E\�D�UDWHG�WKLUG�SDUW\�����

Page 41: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

%�1RQ�&UHGLW�5DWLQJ�6FDOHV�,Q�DGGLWLRQ��)LWFK�5DWLQJV�SURYLGHV�VSHFLDOLVW�UDWLQJV�RQ�RWKHU�WRSLFV��2SHUDWLRQDO�ULVN�UDWLQJV�DUH�DVVLJQHG�WR�VHUYLFHUV�RI�FRPPHUFLDO�DQG�UHVLGHQWLDO�PRUWJDJHV�DQG�RWKHU�DVVHW�W\SHV���$VVHW�PDQDJHU� UDWLQJV� RSLQH� RQ� WKH� UHODWLYH� RSHUDWLRQDO� DQG� ILQDQFLDO� FDSDELOLWLHV� RI� DVVHW�PDQDJHUV�� WUXVWHHV� DQG�RWKHUV�� )XQG�&UHGLW� DQG�RU�9RODWLOLW\�5DWLQJV� DUH� DVVLJQHG� WR� IXQG¶V� RU� ORFDO� JRYHUQPHQW� LQYHVWPHQW� SRRO¶V� SRUWIROLR��0DQ\�RI� WKHVH�UDWLQJV�DUH�RIIHUHG� LQWHUQDWLRQDOO\�DQG� LQ�VRPH�FDVHV�RQ�D�QDWLRQDO�EDVLV�DSSO\LQJ�DSSURSULDWH� UDWLQJV�PRGLILHUV�DQG�LGHQWLILHUV���

%���6HUYLFHU�5DWLQJV�%�����*HQHUDO�6HUYLFHU�5DWLQJV��&RPPHUFLDO�DQG�UHVLGHQWLDO�PRUWJDJH�ORDQV��ORDQV�EDFNHG�E\�DVVHWV�RWKHU�WKDQ�PRUWJDJHV��RU�ORDQV�ZLWKRXW�FROODWHUDO�FDQ�EH�VHUYLFHG�E\�D�FRPELQDWLRQ�RI�SULPDU\��PDVWHU��DQG�RU�VSHFLDO�VHUYLFHUV��0DQ\�WUDQVDFWLRQV�KDYH�DOO�WKUHH�W\SHV�RI�VHUYLFHUV�SUHVHQW��ZKLOH�RWKHUV�PD\�RQO\�KDYH�RQH�RU�WZR��6RPH�RI�WKH�UHDVRQV�IRU�WKH�YDULRXV�VWUXFWXUHV�DUH�DJH�RI�WKH�WUDQVDFWLRQ��FRPSOH[LW\�RI�WKH�ORDQV��VWUHQJWK�RI�WKH�SULPDU\�VHUYLFHU��FXUUHQW�RU�DQWLFLSDWHG�GHOLQTXHQF\��DQG�QHHG�IRU�DGYDQFLQJ����Rating Definitions 7KH�VHUYLFHU�UDWLQJV�DUH�GHVLJQHG�WR�EH�DQ�LQGLFDWLRQ�RI�D�VHUYLFHU¶V�DELOLW\�WR�HIIHFWLYHO\�VHUYLFH�FRPPHUFLDO�PRUWJDJH�EDFNHG�VHFXULWLHV��&0%6���UHVLGHQWLDO�PRUWJDJH�EDFNHG�VHFXULWLHV��50%6���DQG�DVVHW�EDFNHG�VHFXULWLHV�WUDQVDFWLRQV��7KH� UDWLQJV� LQFRUSRUDWH�)LWFK�5DWLQJV¶� DQDO\VLV�RI� WKH�VHUYLFHU¶V�H[SHULHQFH� LQ� WKH�VHUYLFLQJ� EXVLQHVV��PDQDJHPHQW��VWDII��WUDLQLQJ�SURJUDPV��SURFHGXUHV��FRQWUROV��DQG�V\VWHPV�DPRQJ�RWKHUV��7KH�LQIOXHQFH�RI�ILQDQFLDO�FRQGLWLRQ�ZLWKLQ�DQ�RSHUDWLRQDO�UDWLQJ�VFDOH�LV�YHU\�OLPLWHG��DQG�UHODWHV�RQO\�WR�WKRVH�HOHPHQWV�ZKHUH�RSHUDWLRQDO�VWUHQJWK�PD\�EH�GLUHFWO\�DIIHFWHG� E\� ILQDQFLDO� FRQGLWLRQ�� 7KH� DJHQF\¶V� VHUYLFHU� UDWLQJV� WKHUHIRUH� DGGUHVV� IHDWXUHV� RI� WKH� FRPSDQ\¶V� SURILOH�ODUJHO\�LQGHSHQGHQW�RI�WKH�HQWLW\¶V�ILQDQFLDO�FRQGLWLRQ����7KH�DJHQF\�UDWHV�FRPPHUFLDO��UHVLGHQWLDO�DQG�VPDOO�EDODQFH�FRPPHUFLDO�PRUWJDJH�VHUYLFHUV��DV�ZHOO�DV�DVVHW�EDFNHG�VHUYLFHUV�RQ�D�VFDOH�RI������ZLWK���EHLQJ�WKH�KLJKHVW�UDWLQJ��6HUYLFHU�UDWLQJV�PD\�DOVR�EH�DVVLJQHG�WR�VHUYLFHUV�RI�DVVHWV�QRW�FXUUHQWO\�VHFXULWL]HG��7KH�UDWLQJV�DUH�ZULWWHQ�ZLWK�HLWKHU�D�&��5��6%��RU�$%�SUHIL[�WR�GHQRWH�WKH�DVVHW�FODVV�WR�ZKLFK�LW� DSSOLHV�� µ5¶� IRU� UHVLGHQWLDO�PRUWJDJH� ORDQV�� µ&¶� IRU� FRPPHUFLDO�PRUWJDJH� ORDQV�� µ6%¶� IRU� VPDOO� EDODQFH� FRPPHUFLDO�PRUWJDJH� ORDQV�� µ&//¶� IRU� ODUJH�FRPPHUFLDO�PRUWJDJH� ORDQV��DQG� µ$%¶� IRU�DVVHW�EDFNHG�DQG�RU�XQVHFXUHG� ORDQV��7KH�DVVHW� FODVV� SUHIL[�ZLOO� WKHQ� EH�I ROORZHG�E\� WKH� DEEUHYLDWLRQ� GHQRWLQJ� WKH� VHUYLFHU� W\SH�� µ36¶� �SULPDU\� VHUYLFHU��� µ06¶��PDVWHU�VHUYLFHU���µ66¶��VSHFLDO�VHUYLFHU���RU�µ&/6¶��FRQVWUXFWLRQ�ORDQ�VHUYLFHU���7KH�ILQDO�FRPSRQHQW�RI�WKH�UDWLQJ�LV�WKH�UDWLQJ�OHYHO��:LWKLQ�VRPH�RI�WKH�UDWLQJ�OHYHOV��WKH�DJHQF\�IXUWKHU�GLIIHUHQWLDWHV�WKH�UDQNLQJV�E\�SOXVHV�DQG�PLQXVHV���Level 1 Servicer Rating (ABPS1, ABMS1, ABSS1, CPS1, CMS1, CSS1, CCLS1, CLLSS1, RPS1, RMS1, RSS1, SBPS1, SBSS1) 6HUYLFHUV�GHPRQVWUDWLQJ�WKH�KLJKHVW�VWDQGDUGV�LQ�RYHUDOO�VHUYLFLQJ�DELOLW\���Level 2 Servicer Rating (ABPS2, ABMS2, ABSS2, CPS2, CMS2, CSS2, CCLS2, CLLSS2, RPS2, RMS2, RSS2, SBPS2, SBSS2) 6HUYLFHUV�GHPRQVWUDWLQJ�KLJK�SHUIRUPDQFH�LQ�RYHUDOO�VHUYLFLQJ�DELOLW\����Level 3 Servicer Rating (ABPS3, ABMS3, ABSS3, CPS3, CMS3, CSS3, CCLS3, CLLSS3, RPS3, RMS3, RSS3, SBPS3, SBSS3) 6HUYLFHUV�GHPRQVWUDWLQJ�SURILFLHQF\�LQ�RYHUDOO�VHUYLFLQJ�DELOLW\����

Page 42: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

Level 4 Servicer Rating (ABPS4, ABMS4, ABSS4, CPS4, CMS4, CSS4, CCLS4, CLLSS4, RPS4, RMS4, RSS4, SBPS4, SBSS4) 6HUYLFHUV�ODFNLQJ�SURILFLHQF\�GXH�WR�D�ZHDNQHVV�LQ�RQH�RU�PRUH�DUHDV�RI�VHUYLFLQJ�DELOLW\���Level 5 Servicer Rating (ABPS5, ABMS5, ABSS5, CPS5, CMS5, CSS5, CCLS5, CLLSS5, RMS5, RPS5, RSS5, SBPS5, SBSS5) 6HUYLFHUV�GHPRQVWUDWLQJ�OLPLWHG�RU�QR�SURILFLHQF\�LQ�VHUYLFLQJ�DELOLW\���7KH�VHUYLFHUV�DW�OHYHO�RQH�DUH�H[SHFWHG�WR�KDYH�DOO�DUHDV�RI�WKHLU�FRPSDQ\�RSHUDWLQJ�DW�WRS�HIILFLHQF\�DQG�SURGXFWLYLW\��&KDUDFWHULVWLFV�RI�D�OHYHO�RQH�����VHUYLFHU�PD\�LQFOXGH���y� 'HPRQVWUDWHG�H[SHUWLVH�LQ�VHUYLFLQJ�D�GLYHUVH�SRUWIROLR��L�H��ORDQ�W\SH��SURSHUW\�W\SH��DQG�JHRJUDSKLFDO�FRQFHQWUDWLRQ�

DPRQJ�RWKHUV���y� +LJKO\�VHDVRQHG�PDQDJHPHQW�WHDP�ZLWK�D�VXEVWDQWLDO�ZRUNLQJ�KLVWRU\�WRJHWKHU���y� 6WDEOH�HPSOR\HH�EDVH�ZLWK�OLWWOH�WXUQRYHU���y� 9HU\�VWURQJ�DQG�VWDEOH�ILQDQFLDO�UHVRXUFHV���y� 9HU\�ZHOO��GRFXPHQWHG�DQG�FRPSOHWH�SROLFLHV�DQG�SURFHGXUHV��ZKLFK�DUH�UHDGLO\�DYDLODEOH�WR�DOO�HPSOR\HHV���y� )XOO\�LQWHJUDWHG��IOH[LEOH�V\VWHPV�ZLWK�YHUVDWLOH�UHSRUWLQJ�FDSDELOLWLHV����&KDUDFWHULVWLFV�RI�D�OHYHO�WZR�����VHUYLFHU�PD\�LQFOXGH����y� (IIHFWLYH�PDQDJHPHQW�RI�D�GLYHUVH�SRUWIROLR���y� 6HDVRQHG�PDQDJHPHQW�WHDP�ZLWK�D�KLVWRU\�RI�ZRUNLQJ�WRJHWKHU���y� 6WDEOH�HPSOR\HH�EDVH���y� 6WURQJ��VWDEOH�ILQDQFLDO�UHVRXUFHV���y� :HOO��GRFXPHQWHG�DQG�FRPSOHWH�SROLFLHV�DQG�SURFHGXUHV���y� 6WURQJ�V\VWHPV�DQG�UHSRUWLQJ�FDSDELOLWLHV���&KDUDFWHULVWLFV�RI�D�OHYHO�WKUHH�����VHUYLFHU�PD\�LQFOXGH����y� 'HPRQVWUDWHG�SURILFLHQF\�LQ�VHUYLFLQJ�GLYHUVH�SURGXFW�JURXSV���y� $GHTXDWH�ILQDQFLDO�UHVRXUFHV�IRU�LWV�SRUWIROLR�VL]H���y� (IIHFWLYH�LQWHUQDO�FRQWUROV���y� 3URYHQ�SURILFLHQF\�LQ�VWDIILQJ�DQG�WUDLQLQJ���y� (VWDEOLVKHG�FRPSUHKHQVLYH�SROLFLHV�DQG�SURFHGXUHV���y� $�PDVWHU�VHUYLFHU�PXVW�KDYH�H[SHULHQFH�DQG�FRQWUROV�LQ�SODFH�IRU�PRQLWRULQJ�SULPDU\�VHUYLFHUV�DQG�RWKHU�VXE�

VHUYLFHUV���y� $�VSHFLDO�VHUYLFHU�PXVW�GHPRQVWUDWH�DGHTXDWH�ZRUNRXW�DQG�GLVSRVLWLRQ�H[SHULHQFH����6HUYLFHUV�WKDW�UHFHLYH�D�OHYHO�IRXU�����UDWLQJ�PD\�EH�LQFRPSDWLEOH�ZLWK�WKH�VHUYLFLQJ�FULWHULD�HPSOR\HG�E\�)LWFK�5DWLQJV�LQ�UDWLQJ�&0%6�RU�50%6�WUDQVDFWLRQV��XQOHVV�DGGLWLRQDO�VXSSRUW�RU�VWUXFWXUDO�IHDWXUHV�DUH� LQFRUSRUDWHG��/LVWHG�EHORZ�DUH�D�IHZ�VLWXDWLRQV�WKDW�FRXOG�FDXVH�WKH�DVVLJQPHQW�RI�D�OHYHO�IRXU�����UDWLQJ����y� /HQJWK�RI�WLPH�RU�H[SHULHQFH�LQ�VHUYLFLQJ�W\SH�RU�SURGXFW�W\SH���y� 5HFHQW�HYHQW�WKDW�KDV�QRW�KDG�WLPH�WR�EH�UHVROYHG�RU�LWV�HIIHFW�IXOO\�DVVHVVHG��L�H��PHUJHU��DFTXLVLWLRQ��FKDQJH�LQ�

PDQDJHPHQW��RU�V\VWHP�FRQYHUVLRQ��DPRQJ�RWKHUV����y� 6SHFLILF�FRQFHUQ�RU�SUREOHP�ZLWK�WKH�VHUYLFHU����5HVLGHQWLDO� PRUWJDJH� VHUYLFHUV� WKDW� UHFHLYH� D� OHYHO� ILYH� ���� UDWLQJ� H[KLELW� DVSHFWV� LQ� WKHLU� RSHUDWLRQV�� SURFHVV�� RU�ILQDQFLDO� FRQGLWLRQ� WKDW� DUH� LQFRPSDWLEOH� ZLWK� )LWFK� 5DWLQJV¶� FULWHULD� IRU� UDWHG� 50%6� WUDQVDFWLRQV� XQOHVV� VWURQJ�DGGLWLRQDO�VXSSRUW�RU�VWUXFWXUDO�IHDWXUHV�DUH�LQFRUSRUDWHG���7KHUH� PD\� EH� DGMXVWPHQWV� WR� WKH� UDWLQJ� VFDOH� GHVFULEHG� DERYH� WR� PHHW� WKH� UHTXLUHPHQWV� RI� ORFDO� FRQYHQWLRQ� RU�

Page 43: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

UHJXODWLRQ�LQ�VRPH�FRXQWULHV���7KLV�PD\�LQYROYH�YDULDQWV�RQ�WKH�OHWWHU�SUHIL[HV�RU�DGGLWLRQDO�UDWLQJ�FDWHJRULHV�EH\RQG�WKH�VWDQGDUG�����VFDOH���

Page 44: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

%��� )XQG�5DWLQJV�%����� ,QWHUQDWLRQDO�)XQG�&UHGLW�5DWLQJV�

,QWHUQDWLRQDO�)XQG�&UHGLW�5DWLQJV�DUH�DQ�RSLQLRQ�DV�WR�WKH�RYHUDOO�FUHGLW�SURILOH�DQG�YXOQHUDELOLW\�WR�ORVVHV�DV�D�UHVXOW�RI�GHIDXOWV�ZLWKLQ�D�IL[HG�LQFRPH�IXQG�RU�SRUWIROLR��7KH�UDWLQJV�DUH�EDVHG�RQ�WKH�DFWXDO�DQG�SURVSHFWLYH�DYHUDJH�FUHGLW�TXDOLW\�RI�WKH�XQGHUO\LQJ�SRUWIROLR�KROGLQJV��,QWHUQDWLRQDO�)XQG�&UHGLW�5DWLQJV�KDYH�DQ�HOHPHQW�RI�UDWLQJ�PRPHQWXP�HPEHGGHG�DQG��WKHUHIRUH��DOVR�DGGUHVV�WKH�OLNHOLKRRG�WKDW�D�SRUWIROLR�PDLQWDLQV�D�JLYHQ�FUHGLW�TXDOLW\�RYHU�WLPH���

7KH�UDWLQJV�DUH�QRW�WUDGLWLRQDO�FUHGLW�UDWLQJV�ZKLOH�VWDWHG�XVLQJ�WKH�VDPH�VFDOH�DV�,QWHUQDWLRQDO�/RQJ�7HUP�&UHGLW�5DWLQJV�DV�WKH\�UHSUHVHQW�D�UDWLQJ�RQ�D�SDUWLFXODU�VHFXULW\�RU�REOLJRU��7KH�UDWLQJV�RQO\�PHDVXUH�WKH�DJJUHJDWH�FUHGLW�ULVN�RI�D�SRUWIROLR�DQG�GR�QRW�PHDVXUH�H[SHFWHG�ULVN�RI�GHIDXOW�IRU�D�IXQG�LWVHOI�DV�D�IXQG�JHQHUDOO\�FDQQRW�GHIDXOW��)XQG�&UHGLW�5DWLQJV�PD\�EH�DFFRPSDQLHG�E\�)XQG�9RODWLOLW\�5DWLQJV�WR�GLVWLQJXLVK�WKHP�IURP�/RQJ�7HUP�&UHGLW�5DWLQJV��,Q�WKH�DEVHQFH�RI�D�9RODWLOLW\�5DWLQJ��D�µ9�15¶�GHVLJQDWLRQ�ZLOO�EH�XVHG�WR�SURYLGH�IXOO�WUDQVSDUHQF\�DQG�GLIIHUHQWLDWLRQ�IURP�REOLJRU�RU�VHFXULW\�OHYHO�UDWLQJV��

,QWHUQDWLRQDO�)XQG�&UHGLW�5DWLQJV�GR�QRW�DGGUHVV�DQ\�ULVN�RWKHU�WKDQ�FUHGLW�ULVN��,Q�SDUWLFXODU��WKHVH�UDWLQJV�GR�QRW�DGGUHVV�WKH�ULVN�RI�ORVV�GXH�WR�FKDQJHV�LQ�SUHYDLOLQJ�LQWHUHVW�UDWHV��FUHGLW�VSUHDGV�DQG�RWKHU�PDUNHW�FRQGLWLRQV��QRU�GR�WKH\�FRPPHQW�RQ�WKH�DGHTXDF\�RI�PDUNHW�YDOXH�RU�DGGUHVV�WKH�H[WHQW�WR�ZKLFK�IXQG�H[SHQVHV�DQG�FRVWV�PLJKW�UHGXFH�GLVWULEXWLRQV�WR�VKDUHKROGHUV���

/LPLWDWLRQV�RI�WKH�)XQG�&UHGLW�5DWLQJ�6FDOHV�6SHFLILF�OLPLWDWLRQV�UHOHYDQW�WR�ERQG�)XQG�&UHGLW�5DWLQJ�6FDOHV�LQFOXGH�WKH�IROORZLQJ��y� 7KH�UDWLQJV�GR�QRW�SUHGLFW�D�VSHFLILF�OHYHO�RU�UDQJH�RI�SHUIRUPDQFH�RI�D�SRUWIROLR�RYHU�DQ\�JLYHQ�WLPH�SHULRG��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�VXLWDELOLW\�RU�RWKHUZLVH�RI�D�SRUWIROLR�IRU�LQYHVWPHQW�RU�DQ\�RWKHU�SXUSRVHV��y� )XQG�&UHGLW�5DWLQJV�GR�QRW�RSLQH�RQ�DQ\�TXDOLW\�UHODWHG�WR�D�SRUWIROLR�RWKHU�WKDQ�WKH�DFWXDO�DQG�SURVSHFWLYH�DYHUDJH�FUHGLW�TXDOLW\�

RI�WKH�LQYHVWHG�SRUWIROLR���5DWLQJV�DVVLJQHG�E\�)LWFK�5DWLQJV�DUWLFXODWH�DQ�RSLQLRQ�RQ�GLVFUHWH�DQG�VSHFLILF�DUHDV�RI�ULVN��7KH�DERYH�OLVW�LV�QRW�H[KDXVWLYH��DQG�LV�SURYLGHG�IRU�WKH�UHDGHU¶V�FRQYHQLHQFH��5HDGHUV�DUH�UHTXHVWHG�WR�UHYLHZ�WKH�VHFWLRQ�WLWOHG�Understanding Credit Ratings - Limitations and Usage IRU�IXUWKHU�LQIRUPDWLRQ�RQ�WKH�OLPLWDWLRQV�RI�WKH�DJHQF\¶V�UDWLQJV���

Page 45: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

%����� ,QWHUQDWLRQDO�)XQG�9RODWLOLW\�5DWLQJV�,QWHUQDWLRQDO�)XQG�9RODWLOLW\�5DWLQJV�DUH�DQ�RSLQLRQ�DV�WR�WKH�UHODWLYH�VHQVLWLYLW\�RI�D�SRUWIROLR¶V� WRWDO�UHWXUQ�DQG�RU�QHW�DVVHW�YDOXH�WR�DVVXPHG�FKDQJHV�LQ�FUHGLW�VSUHDGV�DQG�LQWHUHVW�UDWHV�DV�ZHOO�DV�FHUWDLQ�RWKHU�PDUNHW�ULVN�SDUDPHWHUV��DQG� WDNLQJ� LQWR�DFFRXQW� WKH�HIIHFWV�RI� OHYHUDJH��ZKHUH�DSSOLFDEOH�� ,QWHUQDWLRQDO�)XQG�9RODWLOLW\�5DWLQJV�GR�QRW�SUHGLFW�WKH�GLUHFWLRQ�RU�PDJQLWXGH�RI�FKDQJHV�LQ�VXFK�PDUNHW�FRQGLWLRQV�DQG�WKHUHIRUH�GR�QRW�SUHGLFW�ZKHWKHU��RU�WKH�H[WHQW�WR�ZKLFK��DQ\�SDUWLFXODU�IXQG�RU�SRUWIROLR�IXQG�ZLOO�SHUIRUP�IDYRXUDEO\�RU�DGYHUVHO\�LQ�WKH�IXWXUH��)XUWKHUPRUH��,QWHUQDWLRQDO�)XQG�9RODWLOLW\�5DWLQJV�GR�QRW�JDXJH�WKH�VHQVLWLYLW\�RI�D�SRUWIROLR�WR�H[WUHPH�ULVNV�WKDW�PD\�UHVXOW�IURP�UHGXFHG�OLTXLGLW\�LQ�VHFRQGDU\�PDUNHWV�RU��LQ�WKH�FDVH�RI�FORVHG�HQG�IXQGV��WKH�HIIHFWV�RI�VHFRQGDU\�PDUNHW�SULFHV�RQ�WKH�IXQG¶V�VKDUHV�GXULQJ�FHUWDLQ�SHULRGV���,QWHUQDWLRQDO�)XQG�9RODWLOLW\�5DWLQJV�DUH�H[SUHVVHG�RQ�D�VFDOH�RI�9����YHU\�ORZ�PDUNHW�ULVN��WR�9����YHU\�KLJK�PDUNHW�ULVN���)LWFK�PD\�HOHFW�QRW� WR�DVVLJQ�D�9RODWLOLW\�5DWLQJ� LQ�FRPELQDWLRQ�ZLWK�D�)XQG�&UHGLW�5DWLQJ�� LQFOXGLQJ� IRU�FHUWDLQ�LOOLTXLG�PDUNHWV�DQG�RU�DVVHW�FODVVHV�ZKHUH� LW�PD\�QRW�EH� IHDVLEOH�� �$GGLWLRQDOO\�� LQ�D� OLPLWHG�QXPEHU�RI�PDUNHWV�� WKH�UDWLQJ�VFDOH�LV�GHWHUPLQHG�E\�WKH�ORFDO�UHJXODWRU\�DXWKRULWLHV��ZKLFK�PD\�SUHFOXGH�WKH�XVH�RI�YRODWLOLW\�UDWLQJV��

9����9HU\�/RZ�0DUNHW�5LVN�)XQGV�UDWHG� µ9��¶�DUH�FRQVLGHUHG� WR�KDYH�YHU\� ORZ�VHQVLWLYLW\� WR�PDUNHW� ULVN��2Q�D� UHODWLYH�EDVLV�� WRWDO� UHWXUQV�DQG�RU�FKDQJHV�LQ�QHW�DVVHW�YDOXH�DUH�H[SHFWHG�WR�H[KLELW�KLJK�VWDELOLW\��VKRZLQJ�ORZ�UHODWLYH�YRODWLOLW\�DFURVV�D�EURDG�UDQJH�RI�PDUNHW�VFHQDULRV��7KHVH�IXQGV�RU�SRUWIROLRV�RIIHU�YHU\�ORZ�ULVN�H[SRVXUH�WR�LQWHUHVW�UDWHV��FUHGLW�VSUHDGV�DQG�RWKHU�ULVN�IDFWRUV��7KH\�DUH�JHQHUDOO\�DVVLJQHG�WR�VKRUW�WHUP�JRYHUQPHQW�SRUWIROLRV�ZLWK�KLJK�FUHGLW�TXDOLW\��

9����/RZ�0DUNHW�5LVN�)XQGV�UDWHG�µ9��¶�DUH�FRQVLGHUHG�WR�KDYH�ORZ�VHQVLWLYLW\�WR�PDUNHW�ULVN��2Q�D�UHODWLYH�EDVLV��WRWDO�UHWXUQV�DQG�RU�FKDQJHV�LQ�QHW�DVVHW�YDOXH�DUH�H[SHFWHG�WR�H[KLELW�UHODWLYHO\�KLJK�VWDELOLW\�DFURVV�D�UDQJH�RI�PDUNHW�VFHQDULRV��7KHVH�SRUWIROLRV�RIIHU�ORZ�ULVN�H[SRVXUH�WR�LQWHUHVW�UDWHV��FUHGLW�VSUHDGV�DQG�RWKHU�ULVN�IDFWRUV��7KH\�DUH�W\SLFDOO\�VKRUW��WR�PHGLXP�WHUP�JRYHUQPHQW�RU�KLJK�FUHGLW�TXDOLW\�SRUWIROLRV�ZLWK�YDULRXV�LQYHVWPHQW�REMHFWLYHV��

9����0RGHUDWH�0DUNHW�5LVN�)XQGV�UDWHG� µ9��¶�DUH�FRQVLGHUHG�WR�KDYH�PRGHUDWH�VHQVLWLYLW\�WR�PDUNHW�ULVN��2Q�D�UHODWLYH�EDVLV��WRWDO�UHWXUQV�DQG�RU�FKDQJHV�LQ�QHW�DVVHW�YDOXH�DUH�H[SHFWHG�WR�H[KLELW�VRPH�YDULDELOLW\�DFURVV�D�UDQJH�RI�PDUNHW�VFHQDULRV�GXH�WR�JUHDWHU�H[SRVXUH�WR�LQWHUHVW�UDWHV��FUHGLW�VSUHDGV�DQG�RWKHU�ULVN�IDFWRUV��7KH\�DUH�JHQHUDOO\�PHGLXP�WHUP�JRYHUQPHQW�RU�VKRUW�WHUP�FRUSRUDWH�SRUWIROLRV��

9����0RGHUDWH�WR�+LJK�0DUNHW�5LVN�)XQGV�UDWHG�µ9��¶�DUH�FRQVLGHUHG�WR�KDYH�µPRGHUDWH¶�RU�µPRGHUDWH�WR�KLJK¶�VHQVLWLYLW\�WR�PDUNHW�ULVN��2Q�D�UHODWLYH�EDVLV��WRWDO� UHWXUQV�DQG�RU� FKDQJHV� LQ�QHW�DVVHW� YDOXHV�DUH�H[SHFWHG� WR�H[SHULHQFH�VLJQLILFDQW� YDULDELOLW\� DFURVV�D�U DQJH�RI�PDUNHW�VFHQDULRV�GXH�WR�VLJQLILFDQW�H[SRVXUH�WR�LQWHUHVW�UDWHV��FUHGLW�VSUHDGV�DQG�RWKHU�ULVN�IDFWRUV��7KH\�DUH�W\SLFDOO\�ORQJHU�WHUP�JRYHUQPHQW�RU�PHGLXP�WHUP�FRUSRUDWH�SRUWIROLRV�ZLWK�VRPH�ORZ�LQYHVWPHQW�JUDGH�RU�KLJK�\LHOG�H[SRVXUH��

9����+LJK�0DUNHW�5LVN�)XQGV� UDWHG� µ9��¶� DUH� FRQVLGHUHG� WR� KDYH� KLJK� VHQVLWLYLW\� WR� PDUNHW� ULVN�� 2Q� D� UHODWLYH� EDVLV�� WRWDO� UHWXUQV� DQG�RU�FKDQJHV�LQ�QHW�DVVHW�YDOXH�DUH�H[SHFWHG�WR�H[SHULHQFH�VXEVWDQWLDO�YDULDELOLW\�DFURVV�D�UDQJH�RI�PDUNHW�VFHQDULRV�GXH�WR�VXEVWDQWLDO� H[SRVXUH� WR� LQWHUHVW� UDWHV�� FUHGLW� VSUHDGV� DQG� RWKHU� ULVN� IDFWRUV�� 7KH\� DUH� W\SLFDOO\� YHU\� ORQJ�WHUP�JRYHUQPHQW�RU�ORQJ�WHUP�FRUSRUDWH�SRUWIROLRV�DQG�PD\�LQFOXGH�VLJQLILFDQW�ORZ�LQYHVWPHQW�JUDGH�RU�KLJK�\LHOG�H[SRVXUHV��

9����9HU\�+LJK�0DUNHW�5LVN�)XQGV�UDWHG� µ9��¶�DUH�FRQVLGHUHG�WR�KDYH�YHU\�KLJK�VHQVLWLYLW\�WR�PDUNHW�ULVN��2Q�D�UHODWLYH�EDVLV��WRWDO�UHWXUQV�DQG�RU�FKDQJHV�LQ�QHW�DVVHW�YDOXH�DUH�H[SHFWHG�WR�H[SHULHQFH�H[WUHPH�YDULDELOLW\�DFURVV�D�UDQJH�RI�PDUNHW�VFHQDULRV�GXH�WR�VXEVWDQWLDO� H[SRVXUH� WR� LQWHUHVW� UDWHV�� FUHGLW� VSUHDGV� DQG� RWKHU� ULVN� IDFWRUV�� 7KH\� DUH� W\SLFDOO\� ORQJ�WHUP� FRUSRUDWH�

Page 46: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

SRUWIROLRV�DQG�PD\�FDUU\�VXEVWDQWLDO�ORZ�LQYHVWPHQW�JUDGH�DQG�RU�KLJK�\LHOG�H[SRVXUH��

9�15�$�µ9�15¶�GHVLJQDWLRQ�ZLOO�EH�DVVLJQHG�ZKHQHYHU�D�9RODWLOLW\�5DWLQJ�LV�QRW�DVVLJQHG��LQFOXGLQJ�LQ�FDVHV�RI�LOOLTXLG�PDUNHWV�DQG�RU�DVVHW�FODVVHV��ZKHUH�LW�PD\�QRW�EH�IHDVLEOH�WR�GHULYH�D�9RODWLOLW\�5DWLQJ�����

/LPLWDWLRQV�RI�WKH�)XQG�9RODWLOLW\�5DWLQJ�6FDOHV�6SHFLILF�OLPLWDWLRQV�UHOHYDQW�WR�)XQG�9RODWLOLW\�5DWLQJ�6FDOHV�LQFOXGH�WKH�IROORZLQJ��y� 7KH�UDWLQJV�GR�QRW�SUHGLFW�D�VSHFLILF�OHYHO�RU�UDQJH�RI�SHUIRUPDQFH�RI�D�SRUWIROLR�RYHU�DQ\�JLYHQ�WLPH�SHULRG��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�VXLWDELOLW\�RU�RWKHUZLVH�RI�D�SRUWIROLR�IRU�LQYHVWPHQW�RU�DQ\�RWKHU�SXUSRVHV��y� )XQG�9RODWLOLW\�5DWLQJV�GR�QRW�RSLQH�RQ�DQ\�TXDOLW\�RWKHU� WKDQ� WKH�VHQVLWLYLW\�RI�D�SRUWIROLRV� WRWDO� UHWXUQ�DQG�RU�FKDQJHV� LQ�QHW�

DVVHW�YDOXH�WR�DVVXPHG�FKDQJHV�LQ�FUHGLW�VSUHDGV�DQG�LQWHUHVW�UDWHV�DV�ZHOO�DV�FHUWDLQ�RWKHU�PDUNHW�ULVN�SDUDPHWHUV��DQG�WDNLQJ�LQWR�DFFRXQW�WKH�HIIHFWV�RI�OHYHUDJH��ZKHUH�DSSOLFDEOH��

�5DWLQJV�DVVLJQHG�E\�)LWFK�5DWLQJV�DUWLFXODWH�DQ�RSLQLRQ�RQ�GLVFUHWH�DQG�VSHFLILF�DUHDV�RI�ULVN��7KH�DERYH�OLVW�LV�QRW�H[KDXVWLYH��DQG�LV�SURYLGHG�IRU�WKH�UHDGHU¶V�FRQYHQLHQFH��5HDGHUV�DUH�UHTXHVWHG�WR�UHYLHZ�WKH�VHFWLRQ�WLWOHG�Understanding Credit Ratings - Limitations and Usage IRU�IXUWKHU�LQIRUPDWLRQ�RQ�WKH�OLPLWDWLRQV�RI�WKH�DJHQF\¶V�UDWLQJV����

Page 47: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

%����� ,QWHUQDWLRQDO�0RQH\�0DUNHW�)XQG�5DWLQJV�,QWHUQDWLRQDO�0RQH\�0DUNHW�)XQG�5DWLQJV�DUH�DQ�RSLQLRQ�RI�WKH�FDSDFLW\�RI�D�PRQH\�PDUNHW�IXQG�WR�SUHVHUYH�SULQFLSDO�DQG� SURYLGH� VKDUHKROGHU� OLTXLGLW\�� )LWFK¶V� ,QWHUQDWLRQDO� 0RQH\� 0DUNHW� )XQG� 5DWLQJV� DUH� EDVHG� RQ�D Q� HYDOXDWLRQ� RI�VHYHUDO�IDFWRUV��LQFOXGLQJ�FUHGLW��PDUNHW��DQG�OLTXLGLW\�ULVN��RYHUDOO�OHYHOV�RI�SRUWIROLR�GLYHUVLILFDWLRQ��PDWXULW\�GLVWULEXWLRQ�RI�DVVHWV�LQ�WKH�SRUWIROLR��DQG�VWDELOLW\�RI�WKH�VKDUHKROGHU�EDVH��,QWHUQDWLRQDO�0RQH\�0DUNHW�)XQG�5DWLQJV�DOVR�UHIOHFW�DQ�RSLQLRQ� RI� WKH� IXQG� VSRQVRU¶V� ZLOOLQJQHVV� DQG�DE LOLW\� WR� SURYLGH� VXSSRUW� WR� D� IXQG� WKURXJK� GHGLFDWHG� UHVRXUFHV��LQYHVWPHQW�PDQDJHPHQW�RYHUVLJKW��DQG��LQ�H[WUHPH�FDVHV��ILQDQFLDO�VXSSRUW���,QWHUQDWLRQDO�0RQH\�0DUNHW�)XQG�5DWLQJV�DGGUHVV��RQ�D�UHODWLYH�EDVLV��WKH�FDSDFLW\�WR�SUHVHUYH�LQYHVWHG�SULQFLSDO�DQG�SURYLGH�VKDUHKROGHU�OLTXLGLW\�LQ�DFFRUGDQFH�ZLWK�WKH�IXQG¶V�RIIHULQJ�WHUPV�����AAAmmf: ³$$$PPI´�UDWLQJV�GHQRWH�H[WUHPHO\�VWURQJ�FDSDFLW\�WR�DFKLHYH�PRQH\�PDUNHW�IXQG¶V�LQYHVWPHQW�REMHFWLYH�RI�SUHVHUYLQJ�SULQFLSDO�DQG�SURYLGLQJ�VKDUHKROGHU�OLTXLGLW\�WKURXJK�OLPLWLQJ�FUHGLW��PDUNHW��DQG�OLTXLGLW\�ULVN����AAmmf: ³$$PPI´� UDWLQJV� GHQRWH� YHU\� VWURQJ� FDSDFLW\� WR� DFKLHYH� PRQH\� PDUNHW� IXQG¶V� LQYHVWPHQW� REMHFWLYH� RI� SUHVHUYLQJ�SULQFLSDO�DQG�SURYLGLQJ�VKDUHKROGHU�OLTXLGLW\�WKURXJK�OLPLWLQJ�FUHGLW��PDUNHW��DQG�OLTXLGLW\�ULVN��� Ammf: ³$PPI´�UDWLQJV�GHQRWH�VWURQJ�FDSDFLW\�WR�DFKLHYH�PRQH\�PDUNHW�IXQG¶V�LQYHVWPHQW�REMHFWLYH�RI�SUHVHUYLQJ�SULQFLSDO�DQG�SURYLGLQJ�VKDUHKROGHU�OLTXLGLW\�WKURXJK�OLPLWLQJ�FUHGLW��PDUNHW��DQG�OLTXLGLW\�ULVN����BBBmmf ³%%%PPI´� UDWLQJV� GHQRWH� DGHTXDWH� FDSDFLW\� WR� DFKLHYH� PRQH\� PDUNHW� IXQG¶V� LQYHVWPHQW� REMHFWLYH� RI� SUHVHUYLQJ�SULQFLSDO�DQG�SURYLGLQJ�VKDUHKROGHU�OLTXLGLW\�WKURXJK�OLPLWLQJ�FUHGLW��PDUNHW��DQG�OLTXLGLW\�ULVN���&DSLWDO�SUHVHUYDWLRQ�PD\�EH�DW�JUHDWHU�ULVN�GXH�WR�DGYHUVH�PDUNHW�FRQGLWLRQV��KHLJKWHQHG�UHGHPSWLRQV��DQG�RU�FUHGLW�ULVN���BBmmf�³%%PPI´�UDWLQJV�GHQRWH�XQFHUWDLQ�FDSDFLW\�WR�DFKLHYH�SULQFLSDO�SUHVHUYDWLRQ���0RQH\�PDUNHW�IXQG�VKDUHKROGHU�OLTXLGLW\�LPSDLUHG�GXH�WR�ZKROHVDOH�LPSRVLWLRQ�RI�UHGHPSWLRQ�UHVWULFWLRQV����Bmmf�³%PPI´�UDWLQJV�GHQRWH�IDLOXUH�WR�SUHVHUYH�FDSLWDO���6RPH�ORVV�RI�LQYHVWHG�SULQFLSDO�LV�OLNHO\��EXW�UHFRYHU\�LV�H[SHFWHG�WR�EH�KLJK����

/LPLWDWLRQV�RI�WKH�0RQH\�0DUNHW�)XQG�5DWLQJ�6FDOHV�6SHFLILF�OLPLWDWLRQV�UHOHYDQW�WR�)XQG�&UHGLW�DQG�9RODWLOLW\�DQG�0RQH\�0DUNHW�)XQG�5DWLQJ�6FDOHV�LQFOXGH�WKH�IROORZLQJ��y� 7KH�UDWLQJV�GR�QRW�SUHGLFW�D�VSHFLILF�OHYHO�RU�UDQJH�RI�SHUIRUPDQFH�RI�D�IXQG�RYHU�DQ\�JLYHQ�WLPH�SHULRG��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�VXLWDELOLW\�RU�RWKHUZLVH�RI�D�IXQG�IRU�LQYHVWPHQW�RU�DQ\�RWKHU�SXUSRVHV��y� 0RQH\�0DUNHW�)XQG�5DWLQJV�GR�QRW�RSLQH�RQ�DQ\�TXDOLW\�UHODWHG�WR�D�PRQH\�PDUNHW�IXQG�RWKHU�WKDQ�LWV�DELOLW\�WR�PDLQWDLQ�D�VWDEOH�

QHW�DVVHW�YDOXH���5DWLQJV�DVVLJQHG�E\�)LWFK�5DWLQJV�DUWLFXODWH�DQ�RSLQLRQ�RQ�GLVFUHWH�DQG�VSHFLILF�DUHDV�RI�ULVN��7KH�DERYH�OLVW�LV�QRW�H[KDXVWLYH��DQG�LV�SURYLGHG�IRU�WKH�UHDGHU¶V�FRQYHQLHQFH��5HDGHUV�DUH�UHTXHVWHG�WR�UHYLHZ�WKH�VHFWLRQ�WLWOHG�Understanding Credit Ratings - Limitations and Usage IRU�IXUWKHU�LQIRUPDWLRQ�RQ�WKH�OLPLWDWLRQV�RI�WKH�DJHQF\¶V�UDWLQJV��

Page 48: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

%����� )XQG�4XDOLW\�5DWLQJV� $� )XQG� 4XDOLW\� 5DWLQJ� SURYLGHV� DQ� LQ�GHSWK� DVVHVVPHQW� RI� D�I XQG¶V� NH\� DWWULEXWHV� DQG� FRQVLVWHQF\� RI� ORQJHU�WHUP�UHWXUQV� UHODWLYH� WR� LWV� SHHU� JURXS� DQG�RU� EHQFKPDUNV�� .H\� DUHDV� DQDO\VHG� LQ� GHWHUPLQLQJ� WKH� UDWLQJ� LQFOXGH� ����LQYHVWPHQW�SKLORVRSK\�DQG�SURFHVVHV��LQFOXGLQJ�ULVN�PDQDJHPHQW��� ����UHVRXUFHV�VXSSRUWLQJ� WKH� LQYHVWPHQW�SURFHVV��VWDIILQJ�DQG�WHFKQRORJ\���DQG�����WKH�LQYHVWPHQW�PDQDJHU¶V�VWUDWHJLF�FRPPLWPHQW��H[SHULHQFH�DQG�ILQDQFLDO�UHVRXUFHV��,Q�DGGLWLRQ�WR�WKLV�³IURQW�RIILFH´�DQDO\VLV��DQ�RSHUDWLRQDO�³SDVV�IDLO´�UHYLHZ�RI�WKH�IXQG¶V�UHJXODWRU\�DQG�FRQWURO�IUDPHZRUN�LV�XQGHUWDNHQ�WR�DVVHVV�ZKHWKHU�NH\�DVSHFWV�RI�WKH�RSHUDWLRQDO�HQYLURQPHQW�DUH�VXIILFLHQWO\�UREXVW��&ROOHFWLYHO\��WKHVH�TXDOLWDWLYH�IDFWRUV�DUH�XVHG�WR�GHULYH�D�4XDOLWDWLYH�$VVHVVPHQW�RQ�D�VFDOH�RI� µ6WURQJ�¶� µ6DWLVIDFWRU\�¶�RU� µ:HDN�¶�)XQG�4XDOLW\�5DWLQJV�DUH�DVVLJQHG�RQ�WKH�EDVLV�RI�WKLV�4XDOLWDWLYH�$VVHVVPHQW�DQG��IRU�DOO�)45V�RWKHU�WKDQ�µ4XDOLI\LQJ¶�� LQ�FRPELQDWLRQ�ZLWK�DQ�DQDO\VLV�RI�WKH�IXQG¶V�KLVWRULFDO�ULVN�DGMXVWHG�SHUIRUPDQFH�UHODWLYH�WR�LWV�EHQFKPDUNV�DQG�RU�VHFWRU�SHHUV��VSHFLILFDOO\�WR�LGHQWLI\�DQG�DGMXVW�IRU�SHUIRUPDQFH�RXWOLHUV�� ‘Excellent’ ‘([FHOOHQW¶�)XQG�4XDOLW\�5DWLQJV�DUH�DVVLJQHG�WR�IXQGV�WKDW�GHPRQVWUDWH��LQ�)LWFK¶V�RSLQLRQ��WKH�KLJKHVW�SURILFLHQF\�DQG�VWURQJHVW� UHVRXUFH� FRPPLWPHQWV� LQ� NH\� DUHDV� RI� WKH� LQYHVWPHQW� PDQDJHPHQW� SURFHVV� DQG� KDYH� GHOLYHUHG� KLJK��FRQVLVWHQW�ORQJ�WHUP�ULVN�DGMXVWHG�UHWXUQV�UHODWLYH�WR�SHHUV�DQG�RU�UHOHYDQW�EHQFKPDUNV��7KH�PDQDJHPHQW�FRPSDQ\¶V�LQYHVWPHQW�SURFHVVHV�DQG�UHVRXUFHV�VWURQJO\�VXSSRUW�WKH�IXQG¶V�DELOLW\�WR�GHOLYHU�KLJK��FRQVLVWHQW�SHUIRUPDQFH�UHODWLYH�WR�SHHUV�RYHU�WKH�ORQJHU�WHUP� �µStrong’�µ6WURQJ¶�)XQG�4XDOLW\�5DWLQJV�DUH�DVVLJQHG�WR�IXQGV�WKDW�GHPRQVWUDWH�� LQ�)LWFK¶V�RSLQLRQ��KLJK�SURILFLHQF\�DQG�VWURQJ�UHVRXUFH�FRPPLWPHQWV�LQ�PRVW�NH\�DUHDV�RI�WKH�LQYHVWPHQW�PDQDJHPHQW�SURFHVV�DQG�KDYH�GHOLYHUHG�JRRG��FRQVLVWHQW�ORQJ�WHUP�ULVN�DGMXVWHG�UHWXUQV�UHODWLYH�WR�SHHUV�DQG�RU�UHOHYDQW�EHQFKPDUNV��WRS�µTXLQWLOH¶�W\SLFDOO\���7KH�PDQDJHPHQW�FRPSDQ\¶V� LQYHVWPHQW� SURFHVVHV� DQG�U HVRXUFHV� VXSSRUW� WKH� IXQG¶V� DELOLW\� WR� GHOLYHU� JRRG�� FRQVLVWHQW� SHUIRUPDQFH�UHODWLYH�WR�SHHUV�RYHU�WKH�ORQJHU�WHUP�� ‘Satisfactory’ µ6DWLVIDFWRU\¶�)XQG�4XDOLW\�5DWLQJV�DUH�DVVLJQHG�WR�IXQGV�WKDW�GHPRQVWUDWH��LQ�)LWFK¶V�RSLQLRQ��DGHTXDWH�SURILFLHQF\�DQG�UHVRXUFH� FRPPLWPHQWV� LQ� NH\� DUHDV� RI� WKH� LQYHVWPHQW�PDQDJHPHQW� SURFHVV� DQG�K DYH�GHOLYHUHG� DYHUDJH� ORQJ�WHUP�ULVN�DGMXVWHG� UHWXUQV� UHODWLYH� WR� SHHUV� DQG�RU� UHOHYDQW� EHQFKPDUNV�� ,Q� VRPH� FDVHV�� UDWLQJV� DW� WKLV� OHYHO� PD\� EH�DVVLJQHG�WR�IXQGV�ZLWK�EHORZ�DYHUDJH�WUDFN�UHFRUGV�SURYLGHG�WKH�PDQDJHPHQW�FRPSDQ\�FDQ�GHPRQVWUDWH�VXEVWDQWLDOO\�UHYLVHG� LQYHVWPHQW� SURFHVVHV� WKDW� PDWHULDOO\� DGGUHVV� VKRUWFRPLQJV� LQ� KLVWRULFDO� SHUIRUPDQFH�� 7KH� PDQDJHPHQW�FRPSDQ\¶V�LQYHVWPHQW�SURFHVVHV�DQG�UHVRXUFHV�VXSSRUW�WKH�IXQG¶V�DELOLW\�WR�GHOLYHU�DYHUDJH�ULVN�DGMXVWHG�SHUIRUPDQFH�UHODWLYH�WR�SHHUV�RYHU�WKH�ORQJHU�WHUP�� ‘Weak’ µ:HDN¶�)XQG�4XDOLW\�5DWLQJV�DUH�DVVLJQHG�WR�IXQGV�WKDW��LQ�)LWFK¶V�RSLQLRQ��IDLO�WR�GHPRQVWUDWH�DGHTXDWH�SURILFLHQF\�DQG�UHVRXUFH�FRPPLWPHQWV�LQ�NH\�DUHDV�RI�WKH�LQYHVWPHQW�PDQDJHPHQW�SURFHVV�DQG�RU�KDYH�GHOLYHUHG�SRRU��LQFRQVLVWHQW��RU�DQ�XQVXEVWDQWLDWHG� ORQJ�WHUP�ULVN�DGMXVWHG�WUDFN�UHFRUG�UHODWLYH�WR�SHHUV�DQG�RU�UHOHYDQW�EHQFKPDUNV��$W�WKLV�WLPH��ZHDNQHVVHV� LQ� WKH�PDQDJHPHQW� FRPSDQ\¶V� LQYHVWPHQW� SURFHVVHV� DQG�U HVRXUFHV� LPSDLU� WKH� IXQG¶V� DELOLW\� WR� GHOLYHU�FRQVLVWHQW�SHUIRUPDQFH�UHODWLYH�WR�SHHUV�RYHU�WKH�ORQJHU�WHUP�� ‘Inadequate’ µ,QDGHTXDWH¶� )XQG� 4XDOLW\� 5DWLQJV� DUH� DVVLJQHG� WR� IXQGV� WKDW� H[KLELW� DQ� LQFRQVLVWHQW�� ZHDN� WUDFN� UHFRUG� �ERWWRP�µTXLQWLOH¶�W\SLFDOO\��FRXSOHG�ZLWK�µ:HDN¶�SURILFLHQF\�DQG�UHVRXUFH�FRPPLWPHQWV�� ‘Qualifying’ 7KH� µ4XDOLI\LQJ¶� GHVLJQDWLRQ� LV� DSSOLHG� WR� IXQGV� WKDW�� DV� GHWHUPLQHG� E\� )LWFK�� ODFN� D�W KUHH�\HDU� WUDFN� UHFRUG� �RU�VXEVWDQWLDOO\� VLPLODU� SUR[\� WUDFN� UHFRUG�� EXW� DUH� MXGJHG� WR� EH� DW� OHDVW� µ6DWLVIDFWRU\¶� XQGHU� )LWFK¶V� IXQG� 4XDOLWDWLYH�$VVHVVPHQW���

Page 49: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

�)LWFK�PD\�XVH�DQ�DOWHUQDWLYH�UDWLQJV�VFDOH�IRU�)XQG�4XDOLW\�5DWLQJV�LQ�FHUWDLQ�PDUNHWV�ZKHUH�UHJXODWLRQV�PDQGDWH��RU�WKH�VWDJH�RI�IXQG�LQGXVWU\�GHYHORSPHQW�FDOOV�IRU�D�SDUWLFXODU�VFDOH�DQG�RU�UDWLQJV�PHWKRGRORJ\��,Q�VXFK�PDUNHWV��)LWFK�ZLOO�FRQIRUP�LWV�UDWLQJV�VFDOH�DQG�PHWKRGRORJ\�WR�WKH�ORFDO�PDUNHWV�UHJXODWRU\�IUDPHZRUN�DQG�SUDFWLFHV��)RU�H[DPSOH��DOO� IXQGV�PD\�EH�UDWHG�RQ�D�QXPHULFDO�VFDOH� UDWKHU� WKDQ� WKH�)45�VL[�WLHU�TXDOLWDWLYH�VFDOH��)LWFK�ZLOO� IXOO\�GLVFORVH� LWV�UDWLQJV�PHWKRGRORJ\�DQG�VFDOH�WR�WKH�H[WHQW�WKH\�GLIIHU�LQ�FHUWDLQ�PDUNHWV�IURP�WKLV�SXEOLVKHG�FULWHULD��

Page 50: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

&ULWHULD�6FRSH�DQG�/LPLWDWLRQV�RI�)XQG�4XDOLW\�5DWLQJV�7KH�SULPDU\� IRFXV�RI� WKLV�FULWHULD� UHSRUW� LV�RQ� IXQGV� WKDW�DUH�DFWLYHO\�PDQDJHG� IRU� WKLUG�SDUW\� LQYHVWRUV�DQG� UHO\�RQ�D �GHILQHG�LQYHVWPHQW�SURFHVV�DQG�VHHN�WR�RXWSHUIRUP�WKHLU�LQYHVWPHQW�SHHU�JURXS�DQG�RU�WDUJHW�EHQFKPDUNV����8VHUV�RI�UDWLQJV�VKRXOG�EH�DZDUH�RI�WKH�JHQHUDO� OLPLWDWLRQV�RQ�WKH�QDWXUH�RI�WKH�LQIRUPDWLRQ�WKDW�UDWHG�HQWLWLHV�RU�WKHLU�DJHQWV�PDNH�DYDLODEOH�WR�)LWFK��,Q�LVVXLQJ�DQG�PDLQWDLQLQJ�)XQG�4XDOLW\�5DWLQJV��)LWFK�UHOLHV�RQ�IDFWXDO� LQIRUPDWLRQ�LW�UHFHLYHV�IURP�IXQG�PDQDJHUV�RU�VSRQVRUV�DQG�IURP�RWKHU�VRXUFHV�WKH�UDWLQJ�DJHQF\�EHOLHYHV�WR�EH�FUHGLEOH��LQFOXGLQJ�/LSSHU��� :KHQ� DVVLJQLQJ� )XQG� 4XDOLW\� 5DWLQJV�� )LWFK� GRHV� QRW� SHUIRUP� GXH�GL OLJHQFH� EXW� FRQGXFWV� D�U HDVRQDEOH�LQYHVWLJDWLRQ� RI� WKH� IDFWXDO� LQIRUPDWLRQ� UHOLHG� XSRQ� E\� LW� LQ� DFFRUGDQFH� ZLWK� LWV� UDWLQJ�PHWKRGRORJ\� DQG�PD\� REWDLQ�UHDVRQDEOH� YHULILFDWLRQ� RI� WKDW� LQIRUPDWLRQ� IURP� LQGHSHQGHQW� VRXUFHV� �HJ�� DXGLWRUV� RU� UHJXODWRUV��� WR� WKH� H[WHQW� VXFK�VRXUFHV� DUH� DYDLODEOH� IRU� D�JL YHQ� IXQG� RU� LQ� D�JL YHQ� MXULVGLFWLRQ�� )XQG�PDQDJHUV�PD\� FKRRVH� QRW� WR� VKDUH� FHUWDLQ�LQIRUPDWLRQ�ZLWK�H[WHUQDO�SDUWLHV�� LQFOXGLQJ�UDWLQJ�DJHQFLHV��DW�DQ\� WLPH��:KLOH�)LWFK�H[SHFWV� WKDW�HDFK�PDQDJHU� WKDW�KDV�DJUHHG�WR�SDUWLFLSDWH�LQ�WKH�UDWLQJ�SURFHVV�ZLOO�VXSSO\�SURPSWO\�DOO�LQIRUPDWLRQ�UHOHYDQW�IRU�HYDOXDWLQJ�WKH�UDWLQJV�RI�WKH� IXQG��)LWFK�QHLWKHU�KDV��QRU�ZRXOG� LW�VHHN�� WKH� ULJKW� WR�FRPSHO� WKH�GLVFORVXUH�RI� LQIRUPDWLRQ�E\�DQ\�DJHQWV�RI� WKH�IXQG���)XQG�4XDOLW\�5DWLQJV�PD\�QRW� LQFRUSRUDWH� ³HYHQW� ULVN´��(YHQW� ULVN� LV�GHILQHG�DV�DQ�XQIRUHVHHQ�HYHQW�ZKLFK��XQWLO� WKH�HYHQW� LV�NQRZQ�� LV�QRW� LQFOXGHG� LQ�WKH�H[LVWLQJ�UDWLQJV��3URPLQHQW�HYHQW�ULVNV�IRU� IXQGV� LQFOXGH�VXGGHQ��GUDPDWLF�DQG�XQH[SHFWHG�FKDQJHV�LQ�ILQDQFLDO�PDUNHW�SULFHV�RU�OLTXLGLW\��DGYHUVH�UHJXODWRU\�GHFLVLRQV��OLWLJDWLRQ��UHGHPSWLRQV��IUDXG�RU�RWKHU�XQIRUHVHHDEOH�EUHDNGRZQV�LQ�FRQWURO�DQG�JRYHUQDQFH��DPRQJ�RWKHUV����)XQG�4XDOLW\�5DWLQJV�LQYROYH�DQ�DVVHVVPHQW�RI�KLVWRULFDO�ULVN�DGMXVWHG�SHUIRUPDQFH�EDVHG�SULPDULO\�RQ�QHW�UHWXUQV��7R�OLPLW�GLVWRUWLRQ�IURP�IHH�OHYHOV��)LWFK�JHQHUDOO\�FRQVLGHUV�WKH�ORZHVW�IHH�VKDUH�FODVV��$V�VXFK��)XQG�4XDOLW\�5DWLQJV�ZLOO�QRW�GLUHFWO\� IDFWRU� LQ� WKH�H[WHQW� WR�ZKLFK�D�KLJKHU� IHH�VKDUH�FODVV¶V�H[SHQVH�VWUXFWXUH�GHYLDWHV� IURP�KLVWRULFDO�QRUPV�DQG��WKHUHIRUH��PD\�UHGXFH�IXWXUH�UHWXUQV�DQG�GLVWULEXWLRQV�WR�D�VKDUHKROGHU�FODVV��'LIIHUHQFHV�LQ�WD[�UHJLPHV�PD\�DOVR�LQIOXHQFH�WKH�DFWXDO��DIWHU�WD[�UHWXUQV�WKDW�LQYHVWRUV�H[SHULHQFH�� 7KH� UDWLQJV� GR�QRW � SUHGLFW� D�SDU WLFXODU� LQYHVWPHQW� RXWFRPH� RU� D�SDU WLFXODU� ULVN�DGMXVWHG� UHWXUQ�� $V� WKH\� DUH� UHODWLYH�ZLWKLQ�D�JLYHQ�SHHU�JURXS��)XQG�4XDOLW\�5DWLQJV�DUH�QRW�FRPSDUDEOH�DFURVV�SHHU�JURXSV��)RU�H[DPSOH��D�µ6WURQJ¶�UDWHG�HPHUJLQJ�PDUNHW�IXQG�PD\�EH�LQWULQVLFDOO\�PRUH�YRODWLOH�WKDQ�RWKHU�VHFWRU�IXQGV�DW�WKH�VDPH�UDWLQJV�OHYHO���)XQG�4XDOLW\�5DWLQJV�DUH�QRW�FUHGLW�UDWLQJV�QRU�DUH�WKH\�LQWHQGHG�DV�LQSXWV�WR�FUHGLW�UDWLQJV��7KHUHIRUH��DQ\�DWWHPSW�WR�FRPSDUH�)XQG�4XDOLW\�5DWLQJV�ZLWK�FUHGLW�UDWLQJV�LQ�WKHLU�UDWLQJV�OHYHOV��WUDQVLWLRQ�UDWHV�RU�RWKHU�WUDGLWLRQDO�³SHUIRUPDQFH�PHWULFV´�ZRXOG�QRW�EH�DSSURSULDWH���7KH�)45V�DUH�QRW�DQG�VKRXOG�QRW�EH�FRQVWUXHG�DV�DQ�LQYHVWPHQW�UHFRPPHQGDWLRQ��7KH\�VKRXOG�EH�YLHZHG�DV�RQH�RI�PDQ\�SRWHQWLDO�LQSXWV�LQWR�DQ�LQYHVWRU¶V�GHFLVLRQ�PDNLQJ�SURFHVV��7KH�)45V�GR�QRW�RSLQH�RQ�WKH�IXQG¶V�OLTXLGLW\�RU�WKH�PDUNHW�YDOXH�RI�LWV�DVVHWV��

Page 51: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

%�����1DWLRQDO�)XQG�&UHGLW��)XQG�9RODWLOLW\��DQG�0RQH\�0DUNHW�)XQG�5DWLQJV�%�������1DWLRQDO�)XQG�&UHGLW�5DWLQJV�,Q�WKH�FDVH�RI�FRXQWULHV�ZLWK�IRUHLJQ�DQG�ORFDO�FXUUHQF\�VRYHUHLJQ�UDWLQJV�VLJQLILFDQWO\�EHORZ�µ$$$¶��)LWFK�5DWLQJV�PD\�SURYLGH�1DWLRQDO�)XQG�&UHGLW�5DWLQJV��6XFK�UDWLQJV�DUH�EDVHG�RQ�WKH�VDPH�VFDOH�DV�WKDW�DSSOLFDEOH�WR�QDWLRQDO� ORQJ�WHUP�FUHGLW�UDWLQJV��ZKLFK�UHVXOWV�LQ�WKH�DVVLJQPHQW�RI�DQ�µ$$$¶�ORQJ�WHUP�FUHGLW�UDWLQJ�WR�WKH�ORZHVW�GHIDXOW�ULVN�UHODWLYH�WR�DOO�WKH�LVVXHUV�RU�LVVXHV�LQ�WKH�VDPH�FRXQWU\����1DWLRQDO�)XQG�&UHGLW�5DWLQJV�SURYLGH�D�UHODWLYH�DVVHVVPHQW�DV�WR�WKH�RYHUDOO�FUHGLW�SURILOH�DQG�YXOQHUDELOLW\�WR�ORVVHV�DV�D�UHVXOW�RI�GHIDXOWV�ZLWKLQ�D�SRUWIROLR��7KH�UDWLQJV�SULPDULO\�DUH�EDVHG�RQ�WKH�DFWXDO�DQG�SURVSHFWLYH�ZHLJKWHG�DYHUDJH�FUHGLW� TXDOLW\� RI� D�SRU WIROLR¶V� XQGHUO\LQJ� KROGLQJV� DV� H[SUHVVHG�E\� WKH� QDWLRQDO� ORQJ�WHUP� FUHGLW� UDWLQJV�� 7KLV� UHODWLYH�DVVHVVPHQW�LV�VROHO\�ZLWKLQ�WKH�FRQWH[W�RI�WKH�FRXQWU\�LQ�TXHVWLRQ���,Q�FHUWDLQ�FRXQWULHV��UHJXODWRUV�KDYH�HVWDEOLVKHG�UDWLQJV�VFDOHV�WR�EH�XVHG�ZLWKLQ�WKHLU�GRPHVWLF�PDUNHWV��XVLQJ�VSHFLILF�QRPHQFODWXUH�� 5HDGHUV� VKRXOG� FRQVXOW� WKH� LQGLYLGXDO� VFDOHV� IRU� HDFK� FRXQWU\� OLVWHG� RQ� WKH� DJHQF\¶V� ZHEVLWH� WR�GHWHUPLQH� LI�DQ\�DGGLWLRQDO�RU�DOWHUQDWLYH�FDWHJRU\�GHILQLWLRQV�DSSO\��)XUWKHU�� WKH� OLWHUDO� WUDQVODWLRQ�RI� WKH� UDWLQJV�PD\�UHVXOW� LQ� VOLJKWO\� GLIIHUHQW� QDPLQJ� FRQYHQWLRQV� LQ� WKH� ORFDO�PDUNHW�� EXW� WKH� IXQFWLRQDO�PHDQLQJ� RI� WKH� UDWLQJ� UHPDLQV�XQFKDQJHG�����

%�������1DWLRQDO�)XQG�9RODWLOLW\�5DWLQJV�1DWLRQDO�)XQG�9RODWLOLW\�5DWLQJV�DUH�DQ�RSLQLRQ�RI�WKH�UHODWLYH�VHQVLWLYLW\�RI�WKH�WRWDO�UHWXUQ�DQG�RU�QHW�DVVHW�YDOXH�RI�D�IXQG�RU�SRUWIROLR��WR�FKDQJHV�LQ�� LQWHUHVW�UDWHV��FUHGLW�VSUHDGV��DV�ZHOO�DV�FHUWDLQ�RWKHU�PDUNHW�ULVN�IDFWRUV��WDNLQJ�LQWR�DFFRXQW� WKH�HIIHFWV�RI� OHYHUDJH��ZKHUH�DSSOLFDEOH�� �8QOLNH� ,QWHUQDWLRQDO�)XQG�9RODWLOLW\�5DWLQJV�� WKHVH�1DWLRQDO�)XQG�9RODWLOLW\�5DWLQJV�DUH�VROHO\�DQ�RSLQLRQ�RI�WKH�UHODWLYH�ULVN�RI�VXFK�IDFWRUV�HQGRJHQRXV�WR�WKH�VRYHUHLJQ�VWDWH�LQ�ZKLFK�WKH�SRUWIROLR� LQYHVWV� DQG� � RSHUDWHV�� 1DWLRQDO� )XQG� 9RODWLOLW\� 5DWLQJV� DUH� H[SUHVVHG� LQ� WHUPV� RI� WKH� VDPH� VFDOH� DQG�GHVFULSWLRQ� DV� ,QWHUQDWLRQDO� 9RODWLOLW\�5DWLQJV� DQG� DUH� VLJQLILHG� E\� WKH� DGGLWLRQ� RI� D�V SHFLDO� LGHQWLILHU� IRU� WKH� FRXQWU\�FRQFHUQHG��VXFK�DV��IRU�H[DPSOH��³9���PH[�´�LQ�WKH�FDVH�RI�0H[LFR����

,Q�FHUWDLQ�FRXQWULHV��UHJXODWRUV�KDYH�HVWDEOLVKHG�)XQG�9RODWLOLW\�5DWLQJ�VFDOHV�WR�EH�XVHG�ZLWKLQ�WKHLU�GRPHVWLF�PDUNHWV��XVLQJ�VSHFLILF�QRPHQFODWXUH��0RUHRYHU��LQ�FHUWDLQ�FRXQWULHV��PDUNHW�FRQYHQWLRQ�KDV�UHVXOWHG�LQ�WKH�XVH�RI�GLIIHUHQW�)XQG�9RODWLOLW\�5DWLQJ�VFDOHV��5HDGHUV�VKRXOG�FRQVXOW�WKH�LQGLYLGXDO�VFDOHV�IRU�HDFK�FRXQWU\�OLVWHG�RQ�WKH�DJHQF\µV�ZHE�VLWH�DW�ZZZ�ILWFKUDWLQJV�FRP�WR�GHWHUPLQH�LI�DQ\�DGGLWLRQDO�RU�DOWHUQDWLYH�FDWHJRU\�GHILQLWLRQV�DSSO\��

%�������1DWLRQDO�0RQH\�0DUNHW�)XQG�5DWLQJV�1DWLRQDO�0RQH\�0DUNHW�)XQG�5DWLQJV�SURYLGH�D� UHODWLYH�RSLQLRQ�RI� WKH�FDSDFLW\�RI�D�PRQH\�PDUNHW� IXQG� WR�SUHVHUYH�SULQFLSDO�DQG�SURYLGH�VKDUHKROGHU�OLTXLGLW\�VROHO\�ZLWKLQ�WKH�FRQWH[W�RI�WKH�FRXQWU\�LQ�TXHVWLRQ��7KH�UDWLQJV�LQ�TXHVWLRQ�DUH�QRW�LQWHUQDWLRQDOO\�FRPSDUDEOH�VLQFH�HDFK�FRXQWU\�KDV�D�1DWLRQDO�5DWLQJ�RI�µ$$$¶�DVVLJQHG�WR�WKH�ORZHVW�GHIDXOW�ULVN�RU� ³EHVW´�FUHGLW�DYDLODEOH� LQ� WKDW�FRXQWU\�DQG�RWKHU�FUHGLWV�DUH� UDWHG�RQO\� UHODWLYH� WR� WKH�HQWLW\�RU� WUDQVDFWLRQ�ZLWK� WKH�ORZHVW� UHODWLYH� GHIDXOW� ULVN� IRU� WKDW� FRXQWU\�� 1DWLRQDO�0RQH\�0DUNHW� )XQG�5DWLQJV� DUH� VLJQLILHG� E\� WKH� DGGLWLRQ� RI� D�VSHFLDO�LGHQWLILHU�IRU�WKH�FRXQWU\�FRQFHUQHG��VXFK�DV��IRU�H[DPSOH��³$$$PPI�PH[�´�LQ�WKH�FDVH�RI�0H[LFR������

/LPLWDWLRQV�RI�WKH�)XQG�&UHGLW�DQG�9RODWLOLW\�DQG�0RQH\�0DUNHW�)XQG�5DWLQJ�6FDOHV�6SHFLILF�OLPLWDWLRQV�UHOHYDQW�WR�)XQG�&UHGLW�DQG�9RODWLOLW\�DQG�0RQH\�0DUNHW�)XQG�5DWLQJ�6FDOHV�LQFOXGH�WKH�IROORZLQJ��y� 7KH�UDWLQJV�GR�QRW�SUHGLFW�D�VSHFLILF�OHYHO�RU�UDQJH�RI�SHUIRUPDQFH�RI�D�IXQG�RYHU�DQ\�JLYHQ�WLPH�SHULRG��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�VXLWDELOLW\�RU�RWKHUZLVH�RI�D�IXQG�IRU�LQYHVWPHQW�RU�DQ\�RWKHU�SXUSRVHV��

Page 52: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

y� )XQG�&UHGLW�5DWLQJV�GR�QRW�RSLQH�RQ�DQ\�TXDOLW\�UHODWHG�WR�D�IXQG�RWKHU�WKDQ�WKH�DYHUDJH�FUHGLW�TXDOLW\�RI� LWV�XQGHUO\LQJ�DVVHWV�DQG�WKHLU�GLYHUVLILFDWLRQ��

y� 9RODWLOLW\�5DWLQJV�GR�QRW�RSLQH�RQ�DQ\�TXDOLW\�RWKHU�WKDQ�WKH�VHQVLWLYLW\�RI�WKH�IXQG¶V�WRWDO�UHWXUQ�WR�DVVXPHG�FKDQJHV�LQ�LQWHUHVW�UDWHV��PRUWJDJH�SUHSD\PHQW�VSHHGV��VSUHDGV��FXUUHQF\�H[FKDQJH�UDWHV�DQG�D�OLPLWHG�QXPEHU�RI�RWKHU�PDUNHW�FRQGLWLRQV��

y� 0RQH\�0DUNHW�)XQG�5DWLQJV�GR�QRW�RSLQH�RQ�DQ\�TXDOLW\�UHODWHG�WR�D�PRQH\�PDUNHW�IXQG�RWKHU�WKDQ�LWV�DELOLW\�WR�PDLQWDLQ�D�VWDEOH�QHW�DVVHW�YDOXH��

�5DWLQJV�DVVLJQHG�E\�)LWFK�5DWLQJV�DUWLFXODWH�DQ�RSLQLRQ�RQ�GLVFUHWH�DQG�VSHFLILF�DUHDV�RI�ULVN��7KH�DERYH�OLVW�LV�QRW�H[KDXVWLYH��DQG�LV�SURYLGHG�IRU�WKH�UHDGHU¶V�FRQYHQLHQFH��5HDGHUV�DUH�UHTXHVWHG�WR�UHYLHZ�WKH�VHFWLRQ�WLWOHG�Understanding Credit Ratings - Limitations and Usage IRU�IXUWKHU�LQIRUPDWLRQ�RQ�WKH�OLPLWDWLRQV�RI�WKH�DJHQF\¶V�UDWLQJV����

Page 53: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

%��� $VVHW�0DQDJHU�5DWLQJ�6FDOH�$VVHW�0DQDJHU�5DWLQJV�DUH�DVVLJQHG� WR�HQWLUH�DVVHW�PDQDJHPHQW�RUJDQL]DWLRQV�RU��ZLWKLQ� ODUJHU�DVVHW�PDQDJHUV�� WR�VSHFLILF�RSHUDWLRQDO�XQLWV�RU�JHRJUDSKLHV��7KH�UDWLQJV�DUH�DVVLJQHG�RQ�D�GHVFULSWLYH�VFDOH�EDVHG�RQ�)LWFK¶V�DVVHVVPHQW�RI� WKH� PDQDJHU¶V� LQYHVWPHQW� DQG� RSHUDWLRQDO� SODWIRUP�� 7KH� DVVHVVPHQW� IRFXVHV� RQ� ILYH� PDLQ� SLOODUV� ��� &RPSDQ\��&RQWUROV��,QYHVWPHQWV��2SHUDWLRQV��DQG�7HFKQRORJ\�±ZKLFK�DUH�GHULYHG�IURP�WKH�DQDO\VLV�DQG�DJJUHJDWLRQ�RI����UDWLQJ�VXE�IDFWRUV��7KH�WRS�WKUHH�UDWLQJV�DUH�H[SHFWHG�WR�DSSO\�WR�WKRVH�DVVHW�PDQDJHUV�WKDW�PHHW�RU�H[FHHG�WKH�VWDQGDUGV�W\SLFDOO\�DSSOLHG�E\�LQVWLWXWLRQDO�LQYHVWRUV�LQ�LQWHUQDWLRQDO�PDUNHWV����

%����� $VVHW�0DQDJHU�5DWLQJ��6FDOH��,QWHUQDWLRQDO��Asset Manager Rating Scale (International) AM Rating Scale AM Rating Definitions

$ERYH� ,QVWLWXWLRQDO�,QYHVWRUV¶�6WDQGDUGV�

+LJKHVW�6WDQGDUGV�$VVHW� PDQDJHU� KDV� DQ� LQYHVWPHQW� SODWIRUP� DQG�R SHUDWLRQDO�IUDPHZRUN�WKDW�)LWFK�FRQVLGHUV�WR�EH�VXSHULRU�UHODWLYH�WR�WKH�VWDQGDUGV�DSSOLHG�E\�LQVWLWXWLRQDO�LQYHVWRUV�LQ�LQWHUQDWLRQDO�PDUNHWV��

+LJK�6WDQGDUGV�$VVHW� PDQDJHU� KDV� DQ� LQYHVWPHQW� SODWIRUP� DQG�R SHUDWLRQDO�IUDPHZRUN� WKDW� )LWFK� FRQVLGHUV� VWURQJ� UHODWLYH� WR� WKH� VWDQGDUGV�DSSOLHG�E\�LQVWLWXWLRQDO�LQYHVWRUV�LQ�LQWHUQDWLRQDO�PDUNHWV���

*RRG�6WDQGDUGV�$VVHW� PDQDJHU� KDV� DQ� LQYHVWPHQW� SODWIRUP� DQG�R SHUDWLRQDO�IUDPHZRUN�WKDW�)LWFK�FRQVLGHUV�JRRG�UHODWLYH�WR�WKH�VWDQGDUGV�DSSOLHG�E\�LQVWLWXWLRQDO�LQYHVWRUV�LQ�LQWHUQDWLRQDO�PDUNHWV��

%HORZ�,QVWLWXWLRQDO�,QYHVWRUV¶�6WDQGDUGV�

%HORZ�6WDQGDUGV�

$VVHW� PDQDJHU� KDV� DQ� LQYHVWPHQW� SODWIRUP� DQG�R SHUDWLRQDO�IUDPHZRUN� WKDW� )LWFK� FRQVLGHUV� WR� FRQWDLQ� VRPH� ZHDNQHVVHV� WKDW�SUHYHQW�LW�IURP�PHHWLQJ�WKH�VWDQGDUGV�DSSOLHG�E\�LQVWLWXWLRQDO�LQYHVWRUV�LQ�LQWHUQDWLRQDO�PDUNHWV�

,QDGHTXDWH�6WDQGDUGV�$VVHW� PDQDJHU� KDV� DQ� LQYHVWPHQW� SODWIRUP� DQG�R SHUDWLRQDO�IUDPHZRUN� WKDW� )LWFK� FRQVLGHUV� WR� FRQWDLQ� PDWHULDO� GHILFLHQFLHV� RU�VXJJHVWV�ZHDN�SURVSHFWV�IRU�FRPPHUFLDO�YLDELOLW\��

Source: Fitch

/LPLWDWLRQV�RI�WKH�$VVHW�0DQDJHU�5DWLQJ�6FDOHV�6SHFLILF�OLPLWDWLRQV�UHOHYDQW�WR�WKH�UDWLQJ�VFDOHV�DSSOLHG�WR�DVVHW�PDQDJHUV�LQFOXGH��y� 7KH�DVVHW�PDQDJHU�UDWLQJV�UHODWH�WR�VSHFLILF�RSHUDWLRQDO�XQLWV�DQG�VSHFLILF�JHRJUDSKLHV�ZLWKLQ�DQ�DVVHW�PDQDJHU�±�WKH\�GR�QRW�

QHFHVVDULO\�UHODWH�WR�OHJDO�HQWLWLHV��y� 7KH�UDWLQJV�GR�QRW�SUHGLFW�D�VSHFLILF�OLNHOLKRRG�RI�DVVHW�PDQDJHU�IDLOXUH�RYHU�DQ\�JLYHQ�SHULRG��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�PDUNHW�YDOXH�RI�DQ\�DVVHW�PDQDJHU¶V�LQYHVWPHQWV�RU�WKDW�DVVHW�PDQDJHU¶V�RZQ�VHFXULWLHV��RU�WKH�

OLNHOLKRRG�WKDW�WKHVH�YDOXHV�PD\�FKDQJH��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�OLTXLGLW\�RI�WKH�DVVHW�PDQDJHU¶V�LQYHVWPHQWV�RU�WKDW�DVVHW�PDQDJHU¶V�RZQ�VHFXULWLHV��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�VXLWDELOLW\�RU�RWKHUZLVH�RI�DQ�DVVHW�PDQDJHU�IRU�LQYHVWPHQW�RU�DQ\�RWKHU�SXUSRVHV��y� 7KH�UDWLQJV�GR�QRW�RSLQH�RQ�WKH�LQYHVWPHQW�VWUDWHJLHV�LPSOHPHQWHG�E\�WKH�DVVHW�PDQDJHU�RU�IRUZDUG�ORRNLQJ�H[SHFWDWLRQV���5DWLQJV�DVVLJQHG�E\�)LWFK�5DWLQJV�DUWLFXODWH�DQ�RSLQLRQ�RQ�GLVFUHWH�DQG�VSHFLILF�DUHDV�RI�ULVN��7KH�DERYH�OLVW�LV�QRW�H[KDXVWLYH��DQG�LV�SURYLGHG�IRU�WKH�UHDGHU¶V�FRQYHQLHQFH��5HDGHUV�DUH�UHTXHVWHG�WR�UHYLHZ�WKH�VHFWLRQ�Understanding Credit Ratings – Limitations and Usage IRU�IXUWKHU�LQIRUPDWLRQ�RQ�WKH�OLPLWDWLRQV�RI�WKH�DJHQF\¶V�UDWLQJV����

Page 54: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

%�����1DWLRQDO�$VVHW�0DQDJHU�5DWLQJ�6FDOH�'HILQLWLRQV���

Asset Manager Rating Scale (National) AM Rating Scale AM Rating Definitions

$ERYH�,QVWLWXWLRQDO�,QYHVWRUV¶�6WDQGDUGV�

+LJKHVW�6WDQGDUGV��[[[��

$VVHW�PDQDJHU�KDV�DQ�LQYHVWPHQW�SODWIRUP�DQG�RSHUDWLRQDO�IUDPHZRUN�WKDW�)LWFK�FRQVLGHUV�VXSHULRU�UHODWLYH�WR�WKH�VWDQGDUGV�DSSOLHG�E\�GRPHVWLF�LQVWLWXWLRQDO�LQYHVWRUV��

+LJK�6WDQGDUGV��[[[��$VVHW�PDQDJHU�KDV�DQ�LQYHVWPHQW�SODWIRUP�DQG�RSHUDWLRQDO�IUDPHZRUN�WKDW�)LWFK�FRQVLGHUV�VWURQJ�UHODWLYH�WR�WKH�VWDQGDUGV�DSSOLHG�E\�GRPHVWLF�LQVWLWXWLRQDO�LQYHVWRUV��

*RRG�6WDQGDUGV��[[[��$VVHW�PDQDJHU�KDV�DQ�LQYHVWPHQW�SODWIRUP�DQG�RSHUDWLRQDO�IUDPHZRUN�WKDW�)LWFK�FRQVLGHUV�JRRG�UHODWLYH�WR�WKH�VWDQGDUGV�DSSOLHG�E\�GRPHVWLF�LQVWLWXWLRQDO�LQYHVWRUV��

%HORZ�,QVWLWXWLRQDO�,QYHVWRUV¶�6WDQGDUGV�

%HORZ�6WDQGDUGV��[[[��

$VVHW�PDQDJHU�KDV�DQ�LQYHVWPHQW�SODWIRUP�DQG�RSHUDWLRQDO�IUDPHZRUN�WKDW�)LWFK�FRQVLGHUV�WR�FRQWDLQ�VRPH�ZHDNQHVVHV�WKDW�SUHYHQW�LW�IURP�PHHWLQJ�WKH�VWDQGDUGV�DSSOLHG�E\�GRPHVWLF�LQVWLWXWLRQDO�LQYHVWRUV��

,QDGHTXDWH�6WDQGDUGV��[[[��

$VVHW�PDQDJHU�KDV�DQ�LQYHVWPHQW�SODWIRUP�DQG�RSHUDWLRQDO�IUDPHZRUN�WKDW�)LWFK�FRQVLGHUV�WR�FRQWDLQ�PDWHULDO�GHILFLHQFLHV�RU�VXJJHVWV�ZHDN�SURVSHFWV�IRU�FRPPHUFLDO�YLDELOLW\��

6RXUFH��)LWFK� ��

Page 55: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

�&�� 2WKHU�)RUPV�RI�2SLQLRQ�,Q�DGGLWLRQ� WR�SXEOLVKHG� LQWHUQDWLRQDO�DQG�QDWLRQDO�VFDOH� UDWLQJV��)LWFK�5DWLQJV�RIIHUV�D�QXPEHU�RI�DGGLWLRQDO� IRUPV�RI�RSLQLRQ�ZLWKLQ�WKH�FRUH�UDWLQJ�EXVLQHVV��

&������5DWLQJ�$VVHVVPHQW�6HUYLFH�)LWFK� 5DWLQJV� FDQ� SURYLGH� 5DWLQJ� $VVHVVPHQW� 6HUYLFH� �5$6�� RSLQLRQV� WR� UDWHG� DQG� XQUDWHG� HQWLWLHV� XQGHU� FHUWDLQ�FLUFXPVWDQFHV��5$6�RSLQLRQV�LQGLFDWH�WR�WKH�LVVXHU�RU�WKHLU�DJHQW�ZKDW�UDWLQJ�OHYHO�WKDW�LVVXHU�DQG�LWV�REOLJDWLRQV�ZRXOG�EH� OLNHO\� WR� UHFHLYH�� JLYHQ� D� VHW� RI� K\SRWKHWLFDO� DVVXPSWLRQV� SURYLGHG� E\� WKH� DVVHVVHG� HQWLW\�� 7KHVH�PLJKW� LQFOXGH�GHWDLOV�UHODWLQJ�WR�D�UHFRQILJXUDWLRQ�RI�WKH�FDSLWDO�VWUXFWXUH�RU�WKH�LPSDFW�RI�DQ�DFTXLVLWLRQ�RU�GLVSRVDO��7KLV�DVVHVVPHQW�LV�D�UDWLQJ�OHYHO�RSLQLRQ�SHUIRUPHG�E\�WKH�DQDO\WLFDO�JURXS�UHVSRQVLEOH�IRU�WKDW�HQWLW\��DQG�IHHGEDFN�LV�SURYLGHG�WR�WKH�DVVHVVHG�HQWLW\��RU�LWV�DJHQW��RU�WKH�HQWLW\¶V�PDMRULW\�RZQHU��RU�WKHLU�DJHQW��LQFOXGLQJ�D�GHWDLOHG�OLVW�RI�DVVXPSWLRQV�DQG�OLPLWDWLRQV�DSSOLHG�LQ�WKH�DVVHVVPHQW��

&�����&UHGLW�2SLQLRQV��µ ¶��:KHUH� D�U DWLQJ� V\PERO� LV� VXIIL[HG�ZLWK� DQ� DVWHULVN� �H�J�� µ%%%� ¶�� RU� �FDW�� QRWDWLRQ�� WKLV� LQGLFDWHV� WKDW� WKH� RSLQLRQ� LV�FRQGLWLRQDO�� &UHGLW�2SLQLRQV� DUH� QRW� JHQHUDOO\� LQWHQGHG� IRU� SXEOLFDWLRQ�� DQG� DUH� JHQHUDOO\� XVHG� DV� LQSXW� RSLQLRQV� WR�RWKHU� UDWLQJ� ZRUN�� 7KH� H[DFW� QDWXUH� RI� WKH� FRQGLWLRQDOLW\� VKRXOG� EH� WDNHQ� IURP� WKH� TXDOLILFDWLRQV� DFFRPSDQ\LQJ� WKH�FUHGLW� RSLQLRQ�� 7KH� FUHGLW� RSLQLRQ�PD\� EH� SRLQW�LQ�WLPH� UDWKHU� WKDQ�PRQLWRUHG�� LW� PD\� EH�E DVHG� RQ� D�O RZHU� OHYHO� RI�LQIRUPDWLRQ��RU�LW�PD\�JLYH�DQ�LQGLFDWLYH�UDWLQJ�OHYHO�VXEMHFW�WR�IXUWKHU�DQDO\VLV�RU�WR�WKH�RFFXUUHQFH�RI�FHUWDLQ�HYHQWV��,W�PD\� UHSUHVHQW� DQ� RWKHUZLVH� IXOO� DQDO\VLV� WKDW� H[FOXGHV� RQH� RU�PRUH� �GLVFORVHG�� DQDO\WLFDO� HOHPHQWV�� SUHFOXGLQJ� WKH�FUHGLW�RSLQLRQ�IURP�UHSUHVHQWLQJ�D�IXOO�UDWLQJ�RSLQLRQ��,Q�HDFK�FDVH��WKH�µ ¶�VXIIL[�LQGLFDWHV�WKDW�WKH�FUHGLW�RSLQLRQ�LV�QRW�IXOO\�FRPSDUDEOH�LQ�DOO�UHJDUGV�ZLWK�SXEOLVKHG�UDWLQJV�DW�WKDW�OHYHO��

&�����2SLQLRQV�3URYLGHG�E\�)LWFK�1RQ�5DWLQJ�$IILOLDWHV�)LWFK�5DWLQJV¶� VLVWHU� FRPSDQ\�� )LWFK� 6ROXWLRQV�� DOVR� SURYLGHV� RSLQLRQV� IRU� ULVN�PDQDJHPHQW� SURIHVVLRQDOV�� LQFOXGLQJ�0DUNHW�,PSOLHG� 5DWLQJV� DQG� 8�6�� )LQDQFLDO� ,QVWLWXWLRQ� 6FRUHV�� 7KHVH� RSLQLRQV� DUH� SURYLGHG� E\� VWDII� ZLWKLQ� )LWFK�6ROXWLRQV��7KH�VFDOHV�XVHG�LQ�RSLQLRQV�SURYLGHG�E\�QRQ�UDWLQJ�DIILOLDWHV�RI�)LWFK�5DWLQJV�DUH�QRW�LQWHUFKDQJHDEOH�ZLWK�RU�HTXLYDOHQW�WR�WKRVH�XVHG�IRU�UDWLQJV�RU�VFRUHV�DVVLJQHG�E\�WKH�DJHQF\�����

Page 56: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

'�� 5DWLQJ�:DWFKHV�DQG�5DWLQJ�2XWORRNV�5DWLQJ�:DWFKHV�DQG�2XWORRNV�IRUP�SDUW�RI�WKH�&UHGLW�5DWLQJ�DQG�LQGLFDWH�WKH�OLNHO\�GLUHFWLRQ�RI�WKH�UDWLQJ���

'������5DWLQJ�:DWFK��5DWLQJ�:DWFKHV� LQGLFDWH� WKDW� WKHUH� LV� D�KH LJKWHQHG� SUREDELOLW\� RI� D�U DWLQJ� FKDQJH� DQG� WKH� OLNHO\� GLUHFWLRQ� RI� VXFK� D�FKDQJH��7KHVH�DUH�GHVLJQDWHG�DV�³3RVLWLYH´�� LQGLFDWLQJ�D�SRWHQWLDO�XSJUDGH��³1HJDWLYH´�� IRU�D�SRWHQWLDO�GRZQJUDGH��RU�³(YROYLQJ´��LI�UDWLQJV�PD\�EH�UDLVHG��ORZHUHG�RU�DIILUPHG��+RZHYHU��UDWLQJV�WKDW�DUH�QRW�RQ�5DWLQJ�:DWFK�FDQ�EH�UDLVHG�RU�ORZHUHG�ZLWKRXW�EHLQJ�SODFHG�RQ�5DWLQJ�:DWFK�ILUVW��LI�FLUFXPVWDQFHV�ZDUUDQW�VXFK�DQ�DFWLRQ���$�5DWLQJ�:DWFK�LV�W\SLFDOO\�HYHQW�GULYHQ�DQG��DV�VXFK��LW�LV�JHQHUDOO\�UHVROYHG�RYHU�D�UHODWLYHO\�VKRUW�SHULRG��7KH�HYHQW�GULYLQJ�WKH�:DWFK�PD\�EH�HLWKHU�DQWLFLSDWHG�RU�KDYH�DOUHDG\�RFFXUUHG��EXW�LQ�ERWK�FDVHV��WKH�H[DFW�UDWLQJ�LPSOLFDWLRQV�UHPDLQ�XQGHWHUPLQHG��7KH�:DWFK�SHULRG�LV�W\SLFDOO\�XVHG�WR�JDWKHU�IXUWKHU�LQIRUPDWLRQ�DQG�RU�VXEMHFW�WKH�LQIRUPDWLRQ�WR�IXUWKHU� DQDO\VLV�� $GGLWLRQDOO\�� D� :DWFK� PD\� EH� XVHG� ZKHUH� WKH� UDWLQJ� LPSOLFDWLRQV� DUH� DOUHDG\� FOHDU�� EXW� ZKHUH� D�WULJJHULQJ� HYHQW� �H�J�� VKDUHKROGHU�RU� UHJXODWRU\� DSSURYDO�� H[LVWV��7KH�:DWFK�ZLOO� W\SLFDOO\� H[WHQG� WR� FRYHU� WKH�SHULRG�XQWLO� WKH� WULJJHULQJ� HYHQW� LV� UHVROYHG� RU� LWV� RXWFRPH� LV� SUHGLFWDEOH� ZLWK� D�KL JK� HQRXJK� GHJUHH� RI� FHUWDLQW\� WR� SHUPLW�UHVROXWLRQ�RI�WKH�:DWFK����5DWLQJ�:DWFKHV� FDQ� EH�HPSOR\HG� E\� DOO� DQDO\WLFDO� JURXSV� DQG� DUH� DSSOLHG� WR� WKH� UDWLQJV� RI� LQGLYLGXDO� HQWLWLHV� DQG�RU�LQGLYLGXDO� LQVWUXPHQWV�� $W� WKH� ORZHVW� FDWHJRULHV� RI� VSHFXODWLYH� JUDGH� �µ&&&¶�� µ&&¶� DQG� µ&¶�� WKH� KLJK� YRODWLOLW\� RI� FUHGLW�SURILOHV�PD\�LPSO\�WKDW�DOPRVW�DOO�UDWLQJV�VKRXOG�FDUU\�D�:DWFK��:DWFKHV�DUH�QRQHWKHOHVV�RQO\�DSSOLHG�VHOHFWLYHO\�LQ�WKHVH�FDWHJRULHV��ZKHUH�D�FRPPLWWHH�GHFLGHV� WKDW�SDUWLFXODU�HYHQWV�RU� WKUHDWV�DUH�EHVW� FRPPXQLFDWHG�E\� WKH�DGGLWLRQ�RI� WKH�:DWFK�GHVLJQDWLRQ��

'������5DWLQJ�2XWORRN��5DWLQJ�2XWORRNV� LQGLFDWH�WKH�GLUHFWLRQ�D�UDWLQJ� LV� OLNHO\� WR�PRYH�RYHU�D�RQH��WR�WZR�\HDU�SHULRG��7KH\�UHIOHFW� ILQDQFLDO�RU�RWKHU�WUHQGV�WKDW�KDYH�QRW�\HW�UHDFKHG�WKH�OHYHO�WKDW�ZRXOG�WULJJHU�D�UDWLQJ�DFWLRQ��EXW�ZKLFK�PD\�GR�VR�LI�VXFK�WUHQGV�FRQWLQXH��7KH�PDMRULW\�RI�2XWORRNV�DUH�JHQHUDOO\�6WDEOH��ZKLFK�LV�FRQVLVWHQW�ZLWK�WKH�KLVWRULFDO�PLJUDWLRQ�H[SHULHQFH�RI�UDWLQJV�RYHU�D�RQH��WR�WZR�\HDU�SHULRG��3RVLWLYH�RU�1HJDWLYH�UDWLQJ�2XWORRNV�GR�QRW�LPSO\�WKDW�D�UDWLQJ�FKDQJH�LV�LQHYLWDEOH�DQG��VLPLODUO\��UDWLQJV�ZLWK�6WDEOH�2XWORRNV� FDQ� EH�U DLVHG� RU� ORZHUHG�ZLWKRXW� D�SU LRU� UHYLVLRQ� WR� WKH�2XWORRN�� LI� FLUFXPVWDQFHV�ZDUUDQW� VXFK� DQ�DF WLRQ��2FFDVLRQDOO\��ZKHUH�WKH�IXQGDPHQWDO� WUHQG�KDV�VWURQJ��FRQIOLFWLQJ�HOHPHQWV�RI�ERWK�SRVLWLYH�DQG�QHJDWLYH��WKH�5DWLQJ�2XWORRN�PD\�EH�GHVFULEHG�DV�(YROYLQJ���2XWORRNV�DUH�FXUUHQWO\�DSSOLHG�RQ�WKH�ORQJ�WHUP�VFDOH�WR�LVVXHU�UDWLQJV�LQ�FRUSRUDWH�ILQDQFH��LQFOXGLQJ�VRYHUHLJQV��LQGXVWULDOV��XWLOLWLHV��ILQDQFLDO�LQVWLWXWLRQV�DQG�LQVXUDQFH�FRPSDQLHV��DQG�SXEOLF�ILQDQFH�RXWVLGH�WKH�8�6���WR�LVVXH�UDWLQJV�LQ�SXEOLF�ILQDQFH�LQ�WKH�8�6���WR�FHUWDLQ�LVVXHV�LQ�SURMHFW�ILQDQFH��WR�,QVXUHU�)LQDQFLDO�6WUHQJWK�5DWLQJV��WR�LVVXHU�DQG�RU�LVVXH�UDWLQJV�LQ�D�QXPEHU�RI�1DWLRQDO�5DWLQJ�VFDOHV��DQG�WR�WKH�UDWLQJV�RI�VWUXFWXUHG�ILQDQFH�WUDQVDFWLRQV�DQG�FRYHUHG�ERQGV��2XWORRNV�DUH�QRW�DSSOLHG�WR�UDWLQJV�DVVLJQHG�RQ�WKH�VKRUW�WHUP�VFDOH�DQG�DUH�DSSOLHG�VHOHFWLYHO\�WR�UDWLQJV�LQ�WKH�µ&&&¶��µ&&¶�DQG�µ&¶�FDWHJRULHV��'HIDXOWHG�UDWLQJV�W\SLFDOO\�GR�QRW�FDUU\�DQ�2XWORRN���

'�����'HFLGLQJ�:KHQ�WR�$VVLJQ�5DWLQJ�:DWFK�RU�2XWORRN�7LPLQJ� LV� LQIRUPDWLYH�EXW�QRW�FULWLFDO� WR� WKH�FKRLFH�RI�D�:DWFK�UDWKHU� WKDQ�DQ�2XWORRN��$�GLVFUHWH�HYHQW� WKDW� LV� ODUJHO\�FOHDU� DQG�W KH� WHUPV�RI�ZKLFK� DUH� GHILQHG�� EXW�ZKLFK�ZLOO� QRW� KDSSHQ� IRU�PRUH� WKDQ� VL[�PRQWKV� ±� VXFK� DV� D�O HQJWK\�UHJXODWRU\� DSSURYDO� SURFHVV� ±� ZRXOG� QRQHWKHOHVV� OLNHO\� VHH� UDWLQJV� SODFHG� RQ�:DWFK� UDWKHU� WKDQ� D� UHYLVLRQ� WR� WKH�2XWORRN����$Q�2XWORRN� UHYLVLRQ�PD\�� KRZHYHU�� EH� GHHPHG�PRUH� DSSURSULDWH� ZKHUH� D�V HULHV� RI� SRWHQWLDO� HYHQW� ULVNV� KDV� EHHQ�

Page 57: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

LGHQWLILHG�� QRQH� RI� ZKLFK� LQGLYLGXDOO\� ZDUUDQWV� D�:DWFK� EXW� ZKLFK� FXPXODWLYHO\� LQGLFDWH� KHLJKWHQHG� SUREDELOLW\� RI� D�UDWLQJ�FKDQJH�RYHU�WKH�IROORZLQJ�RQH�WR�WZR�\HDUV���$�UHYLVLRQ�WR�WKH�2XWORRN�PD\�DOVR�EH�DSSURSULDWH�ZKHUH�D�VSHFLILF�HYHQW�KDV�EHHQ�LGHQWLILHG��EXW�ZKHUH�WKH�FRQGLWLRQV�DQG� LPSOLFDWLRQV� RI� WKDW� HYHQW� DUH� ODUJHO\� XQFOHDU� DQG� VXEMHFW� WR� KLJK� H[HFXWLRQ� ULVN� RYHU� DQ�H[ WHQGHG� SHULRG� ±� IRU�H[DPSOH�D�SURSRVHG��EXW�SROLWLFDOO\�FRQWURYHUVLDO��SULYDWL]DWLRQ��

Page 58: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

(�� 5DWLQJ�$FWLRQV�Standard Rating Actions, Rating Modifiers, Data Actions, Historical Actions

)LWFK�WDNHV�FHUWDLQ�DFWLRQV�LQ�UHODWLRQ�WR�LWV�UDWLQJV��7KHVH�DFWLRQV�FDQ�LQGLFDWH�D�FKDQJH�LQ�WKH�UHODWLYH�FUHGLW�TXDOLW\�RI�WKH�UDWHG�HQWLW\��6HH�6WDQGDUG�5DWLQJ�$FWLRQV��RU�D�UHODWLYH�FKDQJH�LQ�VHUYLFLQJ�TXDOLW\��,Q�DGGLWLRQ��DFWLRQV�UHJDUGLQJ�2XWORRNV�RU�:DWFKHV�SURYLGH�DQ�LQGLFDWLRQ�RI�D�SRWHQWLDO�UDWLQJ�FKDQJH��6HH�5DWLQJ�0RGLILHU�$FWLRQV���RU�RWKHU�HYHQWV��6HH�'DWD�$FWLRQV���

(����� 6WDQGDUG�5DWLQJ�$FWLRQV�Affirmed* 7KH�UDWLQJ�KDV�EHHQ�UHYLHZHG�ZLWK�QR�FKDQJH� LQ� UDWLQJ��� �5DWLQJV�DIILUPDWLRQV�PD\�DOVR� LQFOXGH�DQ�DIILUPDWLRQ�RI��RU�FKDQJH�WR�DQ�2XWORRN�ZKHQ�DQ�2XWORRN�LV�XVHG���Confirmed $FWLRQ�WDNHQ�LQ�UHVSRQVH�WR�DQ�H[WHUQDO�UHTXHVW�RU�FKDQJH�LQ�WHUPV��5DWLQJ�KDV�EHHQ�UHYLHZHG�LQ�HLWKHU�FRQWH[W��DQG�QR�UDWLQJ� FKDQJH� KDV� EHHQ�G HHPHG� QHFHVVDU\�� )RU� VHUYLFHU� UDWLQJV�� DFWLRQ� WDNHQ� LQ� UHVSRQVH� WR� FKDQJH� LQ� ILQDQFLDO�FRQGLWLRQ�RU�,'5�RI�VHUYLFHU�ZKHUH�VHUYLFHU�UDWLQJ�LV�UHYLHZHG�LQ�WKDW�FRQWH[W�H[FOXVLYHO\��DQG�QR�UDWLQJ�DFWLRQ�KDV�EHHQ�GHHPHG�QHFHVVDU\����Downgrade* 7KH�UDWLQJ�KDV�EHHQ�ORZHUHG�LQ�WKH�VFDOH���

Matured*/Paid-In-Full�

D�� µ0DWXUHG¶���7KLV�DFWLRQ�LV�XVHG�ZKHQ�DQ�LVVXH�KDV�UHDFKHG�WKH�HQG�RI�LWV�UHSD\PHQW�WHUP�DQG�UDWLQJ�FRYHUDJH�LV�GLVFRQWLQXHG��'HQRWHG�DV�µ15¶���

E�� µ3DLG�,Q�)XOO¶���7KLV�DFWLRQ�LQGLFDWHV�WKDW�WKH�LVVXH�KDV�EHHQ�SDLG�LQ�IXOO��$V�WKH�LVVXH�QR�ORQJHU�H[LVWV��LW�LV�WKHUHIRUH�QR�ORQJHU�UDWHG��'HQRWHG�DV�µ3,)¶��

New Rating*�5DWLQJ�KDV�EHHQ�DVVLJQHG�WR�D�SUHYLRXVO\�XQUDWHG�LVVXH�SULPDULO\�XVHG�LQ�FDVHV�RI�VKHOI�LVVXHV�VXFK�DV�071V�RU�VLPLODU�SURJUDPV��

Prerefunded *�$VVLJQHG�WR�ORQJ�WHUP�86�3XEOLF�)LQDQFH�LVVXHV�DIWHU�)LWFK�DVVHVVHV�UHIXQGLQJ�HVFURZ��

Publish* ,QLWLDO�SXEOLF�DQQRXQFHPHQW�RI�UDWLQJ�RQ�WKH�DJHQF\¶V�ZHEVLWH��DOWKRXJK�QRW�QHFHVVDULO\�WKH�ILUVW�UDWLQJ�DVVLJQHG��7KLV�DFWLRQ�GHQRWHV�ZKHQ�D�SUHYLRXVO\�SULYDWH�UDWLQJ�LV�SXEOLVKHG. Upgrade* 7KH�UDWLQJ�KDV�EHHQ�UDLVHG�LQ�WKH�VFDOH���Withdrawn* 7KH� UDWLQJ� KDV� EHHQ� ZLWKGUDZQ� DQG� WKH� LVVXH� RU� LVVXHU� LV� QR� ORQJHU� UDWHG� E\� )LWFK� 5DWLQJV�� ,QGLFDWHG� LQ� UDWLQJ�GDWDEDVHV�ZLWK�WKH�V\PERO�µ:'¶��

Rating Modifier Actions��

Page 59: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

0RGLILHUV�LQFOXGH�5DWLQJ�2XWORRN��5DWLQJ�:DWFK��'LVWUHVVHG�5HFRYHU\�5DWLQJ��DQG�5HFRYHU\�5DWLQJ�

Rating Watch Maintained* 7KH�LVVXH�RU�LVVXHU�KDV�EHHQ�UHYLHZHG�DQG�UHPDLQV�RQ�DFWLYH�5DWLQJ�:DWFK�VWDWXV�� Rating Watch On* 7KH�LVVXH�RU�LVVXHU�KDV�EHHQ�SODFHG�RQ�DFWLYH�5DWLQJ�:DWFK�VWDWXV�� Rating Watch Revision* 5DWLQJ�:DWFK�VWDWXV�KDV�FKDQJHG���

Support Floor Rating Revision�$SSOLFDEOH�RQO\�WR�6XSSRUW�UDWLQJV�UHODWHG�WR�)LQDQFLDO�,QVWLWXWLRQV��ZKLFK�DUH�DPHQGHG�RQO\�ZLWK�WKLV�DFWLRQ��

Under Review*�$SSOLFDEOH�WR�UDWLQJV�WKDW�PD\�XQGHUJR�D�FKDQJH�LQ�VFDOH�QRW�UHODWHG�WR�FKDQJHV�LQ�IXQGDPHQWDO�FUHGLW�TXDOLW\�� �)LQDO�DFWLRQ�ZLOO�EH�³5HYLVLRQ�5DWLQJ´��

The Following Actions Will Only Apply in Structured Finance Transactions.

Revision Outlook�5DWLQJ�2XWORRN�VWDWXV�KDV�FKDQJHG�LQGHSHQGHQW�RI�D�IXOO�UHYLHZ�RI�WKH�XQGHUO\LQJ�UDWLQJ� ��

*A rating action must be recorded for each rating in a required cycle to be considered compliant with Fitch policy concerning aging of ratings. Not all Ratings or Data Actions, or changes in rating modifiers, will meet this requirement. Actions that meet this requirement are noted with an * in the above definitions.

E.1.2. Data Actions

'DWD�$FWLRQV�UHIHU�WR�DFWLRQV�WDNHQ�RQ�LQGLYLGXDO�LVVXHUV�RU�LVVXHV�WKDW�GHQRWH�WKH�DVVLJQPHQW�RU�FKDQJH�RI�D�UDWLQJ�EXW�ZKLFK�GR�QRW�LPSO\�DQ\�FKDQJH�LQ�WKH�FUHGLW�TXDOLW\�RI�WKH�HQWLW\��

Revision Enhancement�6RPH�IRUP�RI�WKH�FUHGLW�VXSSRUW�DIIHFWLQJ�WKH�UDWLQJ�RSLQLRQ�KDV�EHHQ�DGGHG�RU�UHPRYHG��

Revision IDR�,VVXHUV�ORQJ�RU�VKRUW�WHUP�UDWLQJ�KDV�EHHQ�FRQYHUWHG�WR�DQ�,VVXHU�'HIDXOW�5DWLQJ��7KLV�DFWLRQ�LV�XVHG�LQ�FDVHV�ZKHUH�WKH�FKDQJH�GRHV�QRW�GHQRWH�DQ�XSJUDGH�RU�GRZQJUDGH��

Revision Rating�5DWLQJ�KDV�EHHQ�PRGLILHG�IRU�UHDVRQV�WKDW�DUH�QRW�UHODWHG�WR�FUHGLW�TXDOLW\��VXFK�DV�WR�UHIOHFW�WKH�LQWURGXFWLRQ�RI�D�QHZ�UDWLQJ�VFDOH��

E.1.3 Historical Actions

Page 60: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

,Q�WKH�HYROXWLRQ�RI�WKH�UDWLQJV�SURFHVV��)LWFK�KDV�HPSOR\HG�DFWLRQV�GHVLJQHG�WR�PHHW�D�VLQJOH�SXUSRVH��7KHVH�DFWLRQV�UHPDLQ�LQ�UDWLQJ�KLVWRU\�EXW�DUH�QRW�H[SHFWHG�WR�EH�UH�XVHG��

Change�%DQN�6XSSRUW�5DWLQJ�ZDV�FKDQJHG�WR�UHIOHFW�QHZ�FULWHULD��/DVW�XVHG�LQ�������

Database Add�,QLWLDO�UDWLQJ�OLVWHG�LQ�)LWFK�5DWLQJV¶�GDWDEDVH��WKRXJK�QRW�QHFHVVDULO\�WKH�ILUVW�UDWLQJ�DVVLJQHG���

Distressed Recovery Rating Revision�&KDQJH�WR�DQ�LVVXHV�'LVWUHVVHG�5HFRYHU\�5DWLQJ�WKDW�LV�LQGHSHQGHQW�RI�LWV�ORQJ��RU�VKRUW�WHUP�UDWLQJ��7KH�WHUP�³'LVWUHVVHG�5HFRYHU\�5DWLQJV´�H[LVWV�RQO\�LQ�UDWLQJ�KLVWRU\��7KHVH�ZHUH�UHSODFHG�E\�5HFRYHU\�5DWLQJV�DV�RI�������5HFRYHU\�5DWLQJV�IRU�6WUXFWXUHG�)LQDQFH�WUDQVDFWLRQV�ZHUH�ZLWKGUDZQ�LQ�1RYHPEHU�������

Bank Individual Ratings

%DQN�,QGLYLGXDO�5DWLQJV�ZHUH�DVVLJQHG�RQ�D�VFDOH�RI�$�WKURXJK�)��7KHVH�UDWLQJV��DWWHPSWHG�WR�DVVHVV�KRZ�D�EDQN�ZRXOG�EH�YLHZHG�LI�LW�ZHUH�HQWLUHO\�LQGHSHQGHQW�DQG�FRXOG�QRW�UHO\�RQ�H[WHUQDO�VXSSRUW��%DQN�9LDELOLW\�5DWLQJV�DUH�QRZ�DVVLJQHG��

Loss Severity Rating Revision�&KDQJH�WR�DQ�LVVXHV�/RVV�6HYHULW\�5DWLQJ�WKDW�LV�LQGHSHQGHQW�RI�LWV�ORQJ�WHUP�RU�VKRUW�WHUP�UDWLQJ���

Recovery Rating Revision�&KDQJH�WR�D�&RUSRUDWH�)LQDQFH�LVVXH¶V�5HFRYHU\�5DWLQJ�WKDW�LV�LQGHSHQGHQW�RI�LWV�ORQJ�RU�VKRUW�WHUP�UDWLQJ��5HFRYHU\�5DWLQJV�DUH�QR�ORQJHU�DVVLJQHG�RU�UHYLVHG�IRU�6WUXFWXUHG�)LQDQFH�LVVXHV��

Revision MMF�5DWLQJ�KDV�EHHQ�UHYLVHG�WR�GHQRWH�PRQH\�PDUNHW�IXQG�WKURXJK�DGGLWLRQ�RI�00)�VXIIL[��$FWLRQ�ZDV�FRPSOHWHG�LQ�-DQXDU\��������

Revision Outlook�5DWLQJ�2XWORRN�VWDWXV�IRU�D�&RUSRUDWH�RU�8�6��3XEOLF�)LQDQFH�UDWLQJ�KDV�FKDQJHG��UHIOHFWLQJ��D�IXOO�UHYLHZ�RI�WKH�XQGHUO\LQJ�UDWLQJ��

Withdrawn – Prerefunded ,QGLFDWHV�D�SUHUHIXQGHG�LVVXH�QR�ORQJHU�FDUULHV�DQ�XQGHUO\LQJ�UDWLQJ�LQ�FDVHV�ZKHUH�)LWFK�LV�QRW�DVNHG�WR�UH�UDWH�WKH�LVVXH�EDVHG�RQ�WKH�UHIXQGLQJ�HVFURZ�

(�����:LWKGUDZDOV�1XPHURXV�IDFWRUV�DUH�FRQVLGHUHG�E\�)LWFK�5DWLQJV�ZKHQ�UHYLHZLQJ�D�UDWLQJ�IRU�ZLWKGUDZDO��$Q�HQWLW\�PD\�FHDVH�WR�H[LVW�LQ� WKH� FRXUVH� RI� D�PHUJHU�SURFHVV� RU� IROORZLQJ� D�E DQNUXSWF\��$� UDWHG� WUDQVDFWLRQ�PD\�EH� UHSDLG� LQ� IXOO�� ,QIRUPDWLRQ�DYDLODEOH�WR�WKH�DJHQF\�PD\�EH�LQVXIILFLHQW�WR�PDLQWDLQ�D�UDWLQJ��7KLV�PD\�RFFXU�ZKHUH�DQ�LVVXHU�GH�OLVWV�IURP�D�VWRFN�H[FKDQJH�� RU� ZKHUH� LW� FHDVHV� WR� FRRSHUDWH� ZLWK� WKH� DJHQF\� DQG� WKH� EDODQFH� RI� SXEOLF� GLVFORVXUH� LV� LQVXIILFLHQW� WR�VXSSRUW� D� UDWLQJ�� )LQDOO\�� WKH� DJHQF\�PD\� ZLWKGUDZ� UDWLQJV� ZKHUH� WKH� OHYHO� RI� PDUNHW� LQWHUHVW�� VHFWRU� FRYHUDJH�� RU�UHVRXUFH�DOORFDWLRQ�OHDGV�WKH�DJHQF\�WR�GLVFRQWLQXH�DQDO\WLFDO�FRYHUDJH���:LWK�WKH�H[FHSWLRQ�RI�WUDQVDFWLRQV�WKDW�DUH�UHSDLG�LQ�IXOO�RQ�VFKHGXOH��DOO�ZLWKGUDZDOV�RI�SXEOLF�UDWLQJV�DUH�GLVFORVHG�LQ�D�UDWLQJ� DFWLRQ� FRPPHQWDU\�� SXEOLVKHG� RQ� WKH� DJHQF\¶V� ZHEVLWHV�� DQG� GLVVHPLQDWHG� WKURXJK� WKH� DJHQF\¶V� HOHFWURQLF�UDWLQJ�IHHGV��7KH�ZLWKGUDZDO�DQQRXQFHPHQW�ZLOO� W\SLFDOO\�VLPSO\�VWDWH� WKH�UDWLQJ�KDV�EHHQ�ZLWKGUDZQ�� WKH� OHYHO�RI� WKH�UDWLQJ�DW�ZLWKGUDZDO��WKH�UHDVRQ�IRU�WKH�ZLWKGUDZDO�DQG�WKDW�DQDO\WLFDO�FRYHUDJH�ZLOO�FHDVH����

Page 61: Fitch Ratings: Definitions of Ratings

)LWFK�5DWLQJV�±�'HILQLWLRQV�RI�5DWLQJV�DQG�2WKHU�)RUPV�RI�2SLQLRQ�±�-XO\�����������

:LWKGUDZDOV�FDQQRW�EH�XVHG�WR�IRUHVWDOO�D�UDWLQJ�DFWLRQ��(YHU\�HIIRUW�LV�WKHUHIRUH�PDGH�WR�HQVXUH�WKDW�WKH�UDWLQJ�RSLQLRQ�XSRQ�ZLWKGUDZDO�UHIOHFWV�DQ�XSGDWHG�YLHZ��:KHUH�VLJQLILFDQW�HOHPHQWV�RI�XQFHUWDLQW\�UHPDLQ��IRU�H[DPSOH��D�UDWLQJ�IRU�DQ� HQWLW\� VXEMHFW� WR� D�W DNHRYHU� ELG�� RU� ZKHUH� LQIRUPDWLRQ� LV� RWKHUZLVH� LQVXIILFLHQW� WR� VXSSRUW� D�U HYLVHG� RSLQLRQ�� WKH�DJHQF\� DWWHPSWV� ZKHQ� SRVVLEOH� WR� LQGLFDWH� LQ� WKH� ZLWKGUDZDO� GLVFORVXUH� WKH� OLNHO\� GLUHFWLRQ� DQG� VFDOH� RI� DQ\� UDWLQJ�PRYHPHQW��KDG�FRYHUDJH�EHHQ�PDLQWDLQHG�