1. finance
2. bank

Credit Opinion: Royal Bank of Scotland Group plc
Global Credit Research - 23 Mar 2015
Edinburgh, United Kingdom
Ratings
Category
Outlook
Senior Unsecured
Subordinate
Jr Subordinate
Pref. Stock
Pref. Stock Non-cumulative
Preference Shelf
Commercial Paper
Other Short Term
Moody's Rating
Rating(s) Under
Review
*Baa2
**B1
***B1 (hyb)
***B1 (hyb)
***B2 (hyb)
**(P)B2
*P-2
*(P)P-2
The Royal Bank of Scotland plc
Outlook
Bank Deposits
Baseline Credit Assessment
Adjusted Baseline Credit
Assessment
Senior Unsecured
Subordinate -Fgn Curr
Subordinate -Dom Curr
Jr Subordinate
Commercial Paper
Other Short Term
Rating(s) Under
Review
**Baa1/P-2
ba1
ba1
***Baa1
Ba3
Ba2
Ba3 (hyb)
P-2
(P)P-2
Royal Bank of Scotland plc,
Australia Branch
Outlook
Senior Unsecured MTN
Other Short Term
Rating(s) Under
Review
***(P)Baa1
(P)P-2
* Placed under review for possible downgrade on March 17, 2015
** Rating(s) within this class was/were placed on review on March 17, 2015
*** Placed under review for possible upgrade on March 17, 2015
Contacts
Analyst
Andrea Usai/London
Alessandro Roccati/London
Robert Young/New York City
Phone
44.20.7772.5454
1.212.553.1653
Key Indicators
Royal Bank of Scotland Group plc (Consolidated Financials)[1]
[2]9-14
[2]12-13
[3]12-12
[3]12-11
[3]12-10 Avg.
[2]9-14 [2]12-13 [3]12-12 [3]12-11 [3]12-10
784,456.0 785,042.0 938,389.01,055,791.01,123,179.0 [4]-8.6
Total Assets (GBP million)
1,006,700.5 943,605.51,156,970.21,263,959.71,310,812.2 [4]-6.4
Total Assets (EUR million)
1,271,712.71,300,233.51,525,339.71,640,802.91,758,511.7 [4]-7.8
Total Assets (USD million)
45,839.6 44,638.7 51,443.1 54,312.2 57,949.4 [4]-5.7
Tangible Common Equity (GBP million)
58,826.4 53,654.9 63,425.8 65,020.8 67,630.2 [4]-3.4
Tangible Common Equity (EUR million)
74,312.3 73,933.3 83,620.1 84,406.5 90,728.8 [4]-4.9
Tangible Common Equity (USD million)
-8.9
8.5
8.1
6.8 [5]8.1
Problem Loans / Gross Loans (%)
12.0
11.6
11.2
12.4
12.4[6]11.8
Tangible Common Equity / Risk Weighted Assets
(%)
-53.2
52.8
52.1
46.8[5]51.2
Problem Loans / (Tangible Common Equity + Loan
Loss
Reserve) (%)
1.4
1.3
1.0
1.2
1.0 [5]1.2
Net Interest Margin (%)
1.1
0.3
1.1
1.7
1.9 [6]0.7
PPI / Average RWA (%)
0.5
-0.8
-0.2
-0.2
-0.4 [5]-0.2
Net Income / Tangible Assets (%)
77.9
92.2
79.1
74.4
65.8[5]77.9
Cost / Income Ratio (%)
35.2
34.0
40.7
46.5
49.4[5]41.2
Market Funds / Tangible Banking Assets (%)
22.3
39.4
41.1
42.4
39.8[5]37.0
Liquid Banking Assets / Tangible Banking Assets
(%)
92.9
92.5
92.0
98.1
105.3[5]96.2
Gross Loans / Total Deposits (%)
Source: Moody's
[1] All figures and ratios are adjusted using Moody's standard adjustments [2] Basel III - fully-loaded or transitional
phase-in; IFRS [3] Basel II; IFRS [4] Compound Annual Growth Rate based on IFRS reporting periods [5] IFRS
reporting periods have been used for average calculation [6] Basel III - fully-loaded or transitional phase-in & IFRS
reporting periods have been used for average calculation
Opinion
SUMMARY RATING RATIONALE
This credit opinion refers to the Royal Bank of Scotland Group plc (RBSG), which is the group holding company.
However, our analysis focuses on Royal Bank of Scotland plc (RBS), the main operating entity, accounting for the
vast majority of the group's total assets.
On 17 March 2015, we placed RBSG's Baa2 senior unsecured long-term debt and its Prime-2 short-term ratings
on review for downgrade. The ratings for the junior instruments of RBSG were placed on review for upgrade.
At the same time, we placed RBS's Baa1 long-term debt and deposit ratings on review for upgrade. RBS's Prime2 short-term ratings and those of its junior subordinated debt instruments were unaffected by this rating action.
RBS's ba1 standalone credit assessment reflects (1) the challenges the group continues to face in implementing
its complex restructuring, despite substantial progress achieved thus far, (2) the group's still sizeable global capital
markets business, despite downsizing achieved over the last several quarters, whose earnings are inherently
volatile and riskier than those from retail and commercial banking activities; (3) its still weak (albeit improving at a
rapid pace) asset quality profile driven by exposure to Ireland, the commercial real-estate (CRE) sector and other
non-performing assets; (4) weak profitability; and (5) past risk management failings.
These factors are somewhat mitigated by (1) strong underlying earnings from non-investment banking activities
which are however currently being eroded by high conduct-related cost and litigation charges; (2) the group's
strong de-risking and restructuring track record; (3) adequate and improving capitalisation, which in our view could
still experience some volatility in the run-up to the completion of the group's overall restructuring plan; and (4)
sound liquidity and funding positions.
The review for upgrade on the long-term deposit and debt ratings for RBS, the review for downgrade on the longterm debt ratings for RBSG and the review for upgrade on the ratings for RBSG's junior instruments, were
underpinned by the bank's standalone credit strength but also take into account the introduction of our new
methodology, and specifically our advanced Loss Given Failure (LGF) analysis.
RBS'S RATING IS SUPPORTED BY ITS `STRONG+' MACRO PROFILE
RBS's Strong+ Macro Profile is driven by its exposure to the UK and North America to which we assign `Very
Strong-` Macro Profiles, partly offset by its exposures to Ireland and the rest of the EU, which are weaker. As one
of the largest banks in the UK, RBS benefits from operating in a wealthy and developed country with a very high
degree of economic, institutional and government financial strength as well as very low susceptibility to event risk.
The main risks to the system stem from the high level of indebtness of the UK households sector, which is
sensitive to changes in interest rates. UK banks are largely funded by deposits and banks' funding structure has
remained relatively stable in the past few years, with slight increases in capital and internal funds, as well as a
decline in short-term funding. The UK banking sector is relatively concentrated and the price-setting dominance of
large banks is somewhat challenged by competition from the shadow banking market.
RATING DRIVERS
- RBS's ambitious and complex overall restructuring poses short-term risks to bondholders but will eventually
improve its credit profile
- We expect RBS's capitalisation to continue to improve in the medium term as the bank progresses its
deleveraging plan, but it remains vulnerable to short-term shocks
- RBS's capital markets activities have been reduced but remain sizeable and will continue to constrain its credit
profile, until further planned material reduction is achieved
- Asset quality remains weak compared to UK peers but it is improving rapidly, as the RCR wind-down is
progressed and credit conditions in the UK and Ireland continue to improve
- RBS's retail and commercial banking activities provide sizeable "shock-absorbers" but these continue to be
eroded by ongoing conduct and litigation costs
- Liquidity and funding are currently sound
- Moderate probability of government support resulting in a one-notch uplift incorporated in RBS's long-term debt
and deposit ratings
RATING OUTLOOK
The review for upgrade on the long-term deposit and debt ratings for RBS was triggered by the introduction of our
new methodology, specifically the advanced Loss Given Failure (LGF) analysis, which applies to the group, given
that it is subject to an operational resolution regime under the Bank Recovery and Resolution Directive (BRRD).
Our advanced LGF analysis on these ratings was not conclusive and led us to place them on review.
The review will focus on the firm's liability structure, in particular the amount of senior long-term debt outstanding,
and the amount of debt that is subordinated to it. We expect RBS's long-term deposit and debt ratings to be
affirmed, depending on the degree of loss-given-failure, and to include one notch of government support, reflecting
a moderate probability of systemic support.
The review for downgrade on the long-term debt ratings for RBSG will focus on the same variables. However, we
expect a more significant downgrade of two notches to the senior debt issued by the group's holding company,
because (1) it will likely benefit from less protection in the liability structure and thus face a moderate level of lossgiven-failure, and (2) we believe the probability of government support for holding company obligations to be low,
resulting in no systemic support uplift.
The review for upgrade on RBSG's junior instruments will likewise consider the group's liability structure. We
expect to conclude that these instruments face a high loss-given-failure.
We continue to assess the probability of government support for the subordinated instruments issued by RBS and
RBSG as low, leading to no systemic support uplift for these instruments, as is currently the case.
WHAT COULD CHANGE THE RATING - UP
Upward pressure on RBS's ba1 standalone credit assessment could develop over the short- to medium term if the
bank were to return to sustainable profitability and generate capital organically. A tangible reduction of downside
risks posed by the group's overall restructuring would lead us to increase the bank's BCA. The planned reduction
of the bank's capital markets operations could also be positive for the BCA because these activities are inherently
risky and thus further constrain the bank's credit ratings.
A positive change in the bank's BCA would likely affect all ratings. RBS's senior unsecured debt and deposit
ratings could also be upgraded if the holding company were to issue significant amounts of long-term debt.
WHAT COULD CHANGE THE RATING - DOWN
Downward pressure on RBS's ba1 standalone credit assessment could develop if the bank's restructuring and derisking strategy failed to deliver improvements in its credit fundamentals, weakening its capital, asset quality,
profitability and efficiency levels. A deterioration in the operating environment in which RBS operates and/or
regulatory and litigation charges substantially higher than what we expect, could also result in a reduction of the
BCA. A downward movement in RBS's standalone credit assessment would likely result in downgrades of all
ratings.
The long-term senior debt ratings of RBSG are on review for downgrade, driven by our review of the likely lossgiven-failure faced by these securities as well as the reduction in our assumptions with regard to the probability of
government support. If we conclude that the group's liability structure is in line with our current understanding, we
expect to downgrade RBSG's senior unsecured debt ratings by two notches and affirm RBS's long-term deposit
and debt ratings at the current levels.
DETAILED RATING CONSIDERATIONS
The financial data in the following sections are sourced from RBS's financial statements unless otherwise stated.
AMBITIOUS AND COMPLEX RESTRUCTURING POSES RISKS TO BONDHOLDERS BUT WILL
EVENTUALLY IMPROVE ITS CREDIT PROFILE
RBS is implementing a multi-year restructuring programme of all of its core operations, consisting of (1)
consolidation of its operations into three main divisions and centralisation of support functions; (2) a very large
downsizing of its international footprint and investment banking operations (management intends to reduce the
corresponding risk-weighted assets (RWAs) to GBP35-40 billion by 2019); and (3) a substantial 40% reduction of
its cost base. These initiatives are in addition to the accelerated wind-down of the bank's legacy asset portfolio
(RBS Capital Resolution, RCR) and the full disposal of its US commercial banking operations, which management
announced at the end of 2013.
The restructuring of the group operations is intended to materially change its business mix, risk profile, and
efficiency levels, making RBS a more efficient UK-focused bank with less risky operations. However, it clearly
indicates that RBS's operations will not stabilise until this plan is delivered over the next 3-5 years. We view this
initiative as ultimately positive for the bank's creditors because, if executed according to plan, it will (1) improve the
bank's asset-quality profile; (2) reduce the group's overall risk profile and simplify its operations; (3) make the bank
more efficient and restore its profitability; and (4) materially strengthen its solvency.
Despite good progress made thus far, we believe that significant headwinds could still materialise in the short to
medium term, challenging the execution of this restructuring, such as the crystallisation of unexpected conduct
and litigation costs and high-profile pending investigations. This risk is particularly significant for RBS, given that in
our view (1) the execution of this overall group restructuring will heavily weigh on the group's profits, impairing the
bank's ability to generate capital internally (besides deleveraging being largely dependent on investors' appetite
and market conditions); and (2) RBS's ability to raise fresh equity capital from external sources is somewhat
constrained by its quasi-ownership by the UK government and its lack of willingness to inject further capital into
the bank. This means that RBS's financial flexibility to absorb unexpected losses during the restructuring period
remains constrained, despite recent material improvement in its regulatory capital position. Our assigned score of
ba1 for Asset Risk reflects both the good improvement RBS has achieved in asset quality but also the still high
level of operational risk associated with the execution of its restructuring.
RBS'S CAPITAL MARKETS ACTIVITIES ARE STILL SIZEABLE AND WILL CONTINUE TO CONSTRAIN ITS
CREDIT PROFILE, UNTIL PLANNED MATERIAL REDUCTION IS ACHIEVED
RBS significantly restructured its investment banking operations (now part of the Corporate & Institutional Banking
division) over the last few years, including the exit from several activities. However, it continues to retain a
significant presence in global debt capital markets, despite the ongoing reduction of the bank's capital markets
operations, including the more recent downsize of its securities business in the US.
As part of the broader restructuring of its core operations, RBS has announced further substantial downsizing of
its investment banking to GBP35-40 billion RWAs by 2019 (from around GBP107 billion RWAs at end-2014).
Although the full details of this sizeable reduction have yet to be disclosed, RBS management has indicated that
going forward, the objective of RBS's investment banking operations would be to support its corporate banking
business. The ba1 scoring that we have assigned to the Asset Risk factor takes into account market risk that is
carried by these still sizeable activities. Further reduction in capital markets could be positive for the ratings
because revenues from these activities are inherently volatile, as they largely depend on market conditions. In
addition, these activities are generally high consumers of regulatory capital. The high degree of volatility of capital
markets revenues and inherent risks carried by this type of activity currently constrains the credit profile of RBS
and those of its global peers and is reflected in a one-notch negative adjustment for opacity and complexity, in the
qualitative section of our scorecard.
ASSET QUALITY IS IMPROVING RAPIDLY AS THE RCR WIND-DOWN IS PROGRESSED AND CREDIT
CONDITIONS IN THE UK AND IRELAND CONTINUE TO IMPROVE
RBS's asset quality profile has improved materially - owed to the disposal of non-performing assets as part of the
RCR wind-down - as indicated by a reduction in problem loans (defined as Risk Elements in Lending) as a
proportion of gross loans to 6.8% at end-2014, from 9.4% a year earlier. We expect this positive trend to continue
as the bank makes progress towards the completion of the RCR workout and our expectation of continued
improvements in the operating environment in both the UK and Ireland.
Despite this improvement, however, RBS's asset quality remains negatively affected by its exposures to Ireland
and a sizeable portion of other non-performing loans, including UK CRE. If achieved as planned, we expect the
wind-down of the RCR (which will largely be achieved by the end of 2015), to deliver further material improvement
to the group's asset quality metrics.
WE EXPECT RBS'S CAPITALISATION TO CONTINUE TO IMPROVE IN THE MEDIUM TERM AS
DELEVERAGING IS PROGRESSED BUT IT REMAINS VULNERABLE TO SHORT-TERM SHOCKS
We expect RBS's capital position to improve in the medium term, owed to (1) a further reduction in capital
allocated to capital markets, (2) the aggressive workout of the RCR, and (3) further asset quality improvements,
tempered by a continuing regulatory focus on capital.
The implementation of the overall group restructuring implies that the associated large credit/disposal costs and
material restructuring charges, will continue to heavily depress profitability during the restructuring period. Despite
these anticipated charges, we expect that RBS will increase its regulatory capital ratios during this period, as it
continues to deleverage. We also expect that ongoing conduct and litigation costs will continue to erode earnings
in its core businesses in the coming quarters; these costs could be subject to periodic, unforeseen spikes, as it
has occurred to date.
RBS reported a Common Equity Tier 1 (CET1) ratio of 11.2% under full Basel III rules at end-2014, which is well
placed by European domestic and international comparisons. However, we believe that the capital ratios could still
experience some volatility, as the group restructuring is executed and other expenses, such as litigation and
restructuring costs, are incurred. Management has recently reiterated that progress towards achieving its
recovery plan would increase its CET1 ratio over time to >11% for 2015 and has revised to >13% the target for
2016. We believe that these medium-term targets are achievable, given RBS's underlying earnings generation
capacity, its plans to accelerate the wind down of RCR assets, its successful deleveraging efforts, and expected
further improvements in underlying asset quality, particularly in the UK. However, capital remains vulnerable to
short-term shocks in our view. While the announced issuance of at least GBP2 billion of high trigger additional tier
1 (AT1) capital will enhance our calculation of Tangible Common Equity, the potential volatility that the group's
capital ratios could still experience and the bank's limited ability to tap the equity market result in a negative
adjustments to the Capital score, leading to an assigned score of baa2.
RBS reported leverage ratio of 4.2% as at end-2014, above the UK Prudential Regulatory Authority's current 3%
requirement.
RBS'S RETAIL AND COMMERCIAL BANKING ACTIVITIES PROVIDE SIZEABLE "SHOCK-ABSORBERS"
BUT THESE CONTINUE TO BE ERODED BY ONGOING CONDUCT AND LITIGATION RELATED COSTS
RBS maintains a leading position in the UK financial services market, where it mainly operates under the RBS and
the NatWest brands. The group also has a strong regional US franchise -- which it has successfully started to
divest - as well as the relatively small but profitable UK-based wealth management business (Coutts, unrated).
The bank's core retail and commercial businesses have thus far been affected by a number of operational risk
events, such as regulatory investigations and IT breakdowns, which continue to weigh on the bank's reputation.
Although this shows that RBS's core franchise is very resilient, the risk that additional reputational issues could
negatively impact its franchise remains elevated.
Albeit reducing due the ongoing downsizing of RBS's operations, retail and commercial activities continue to
provide good underlying shock absorbers against the potential earnings volatility stemming from the bank's capital
markets activities. The large losses reported by the bank in previous years have resulted in a negative macroadjusted Profitability ratio.
We expect RBS's profitability to continue to be negatively impacted by the elevated restructuring costs of its from
the core operations. Management has budgeted an additional GBP2.5 to GBP3.5 billion restructuring and asset
disposal costs over the coming years, as a result of further restructuring in investment banking. This is in addition
to the GBP5 billion charges already announced last year (of which £1.3 billion were already accounted for, in
2014). Reflecting these weaknesses relative to the BCA, we assign a b3 score for Profitability.
LIQUIDITY AND FUNDING ARE CURRENTLY SOUND
In our view, RBS has sound liquidity and funding positions, as reflected in the baa1 Combined Liquidity Score.
However, in line with other capital market participants, the bank has large, albeit reducing, wholesale (secured and
unsecured) funding requirements, which increase the institution's sensitivity to market confidence.
The group reported a loan-to-deposit ratio of 95% at end-2014. RBS has continued to reduce its reliance on
wholesale funding with a funded balance sheet of GBP697 billion as at end-2014, versus GBP740 billion a year
earlier. Market funding represented around 20% of tangible banking assets at the end-September 2014 (our
calculation) and we expect this ratio to continue to improve, as further deleveraging is achieved. In addition, the
group's wholesale funding stock of GBP118 billion at end-2014 was more than fully covered by the liquidity buffer
of GBP151 billion, as at the same reporting date, indicating a much stronger liquidity position than those of many of
its European peers.
Overall our assigned BCA of ba1 is in line with our unadjusted scorecard.
NOTCHING CONSIDERATIONS
LOSS GIVEN FAILURE AND ADDITIONAL NOTCHING
RBSG is subject to the UK implementation of the EU Bank Recovery and Resolution Directive (BRRD), which we
consider to be an Operational Resolution Regime. We assume residual tangible common equity of 3% and losses
post-failure of 8% of tangible banking assets, a 25% run-off in "junior deposits", a 5% run-off in preferred deposits,
and assign a 25% probability to deposits being preferred to senior unsecured debt, in line with our standard
assumptions. In our balance sheet at failure, we include deposits and assets related to Royal Bank of Scotland
Holdings N.V. ((P)Baa2 on review for downgrade), as these are gradually been transferred to RBS. However, we
exclude those of Ulster Bank Ireland Limited and Citizens, which are based outside the scope of the UK
Resolution authorities.
For RBS's deposits, our initial LGF analysis is not conclusive and our review will consider the likely impact on
loss-given-failure, due to the loss absorption provided by subordinated debt and, potentially, by senior unsecured
debt should deposits be treated preferentially in a resolution, as well as the substantial volume of deposits
themselves. Our preliminary analysis indicates a potential outcome of very low loss-given-failure, which would
result in a Preliminary Rating Assessment (PRA) two notches above the BCA.
For RBS's senior unsecured debt, our initial LGF analysis is less conclusive and our review will consider the likely
impact on loss-given-failure of the combination of its own volume and the amount of debt subordinated to it. We
expect this will result in a PRA of two notches above the BCA.
For the holding company RBSG's senior unsecured debt, our initial LGF analysis is likewise not conclusive and
our review will consider the likely impact on loss-given-failure of the combination of its own volume and the amount
of debt subordinated to it. We expect this will result in a PRA in line with RBS's BCA or ba1.
For junior securities issued by RBS our initial LGF analysis confirms a high level loss-given-failure, given the small
volume of debt and limited protection from more subordinated instruments and residual equity. We also incorporate
additional notching for junior subordinated and preference share instruments reflecting coupon suspension risk
ahead of failure. The resulting PRAs are set out below.
GOVERNMENT SUPPORT
The implementation of BRRD has caused us to reconsider the potential for government support to benefit certain
creditors. We now expect moderate probability of government support for RBS's junior deposits and senior
unsecured debt, resulting in a one-notch uplift to the PRA.
For RBSG's senior unsecured debt, we now consider the probability of government support to be low and
therefore we no longer expect to include uplift for systemic support. This is because systemic support would only
be likely to be provided to the operating entity, to be able to maintain its critical functions and mitigate risks to
financial stability, from its failure.
For other junior securities, we continue to assess low government support assumption, and, as such, the ratings
for these instruments do not include any related uplift.
About Moody's Bank Scorecard
Our Scorecard is designed to capture, express and explain in summary form our Rating Committee's judgment.
When read in conjunction with our research, a fulsome presentation of our judgment is expressed. As a result, the
output of our Scorecard may materially differ from that suggested by raw data alone (though it has been calibrated
to avoid the frequent need for strong divergence). The Scorecard output and the individual scores are discussed in
rating committees and may be adjusted up or down to reflect conditions specific to each rated entity.
Rating Factors
Royal Bank of Scotland Group plc
Macro Factors
Weighted Macro Profile
Financial Profile
Factor
Strong +
Historic
Ratio
Macro Credit Trend
Adjusted
Score
Assigned
Score
Key driver #1
Key driver #2
Solvency
Asset Risk
Problem Loans / Gross
Loans
8.9%
ba2
↑↑
ba1
Operational risk
Quality of
assets
12.0%
a3
↑
baa2
Access to
capital
Expected trend
-0.2%
caa1
↑
b3
Expected trend
Capital
TCE / RWA
Profitability
Net Income / Tangible
Assets
Combined Solvency
Score
Liquidity
Funding Structure
Market Funds / Tangible
Banking Assets
ba1
ba1
34.0%
ba1
↑
baa3
39.4%
a1
←→
a1
Deposit quality Expected trend
Liquid Resources
Liquid Banking Assets /
Tangible Banking
Assets
Combined Liquidity
Score
baa1
baa1
Quality of liquid
assets
Financial Profile
baa3
Qualitative Adjustments
Adjustment
Business Diversification
Opacity and Complexity
Corporate Behavior
0
-1
0
Total Qualitative
Adjustments
-1
Sovereign or Affiliate
constraint
Aa1
Scorecard Calculated
BCA range
baa3 - ba2
Assigned BCA
ba1
0
Affiliate Support
notching
Adjusted BCA
Instrument Class
ba1
Loss Given Additional Preliminary
Failure
notching
Rating
notching
Assessment
Government Local Currency
Foreign
Support
rating
Currency rating
notching
Deposits
--
--
--
--
Senior unsecured bank
debt
--
--
--
--
Senior unsecured
holding company debt
--
--
--
--
Dated subordinated
bank debt
Dated subordinated
holding company debt
-1
0
ba2
0
--
--
--
--
Junior subordinated
bank debt
Junior subordinated
holding company debt
-1
-1
ba3
0
--
--
--
--
Holding company
cumulative preference
shares
Holding company noncumulative preference
shares
--
--
--
--
--
--
--
--
Baa1 RUR
Possible
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Baa1 RUR
Possible
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(P)Baa2 RUR
Possible
Downgrade
Ba2
Baa1 RUR
Possible
Upgrade
Baa1 RUR
Possible
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Baa2 RUR
Possible
Downgrade
Ba2
(P)Ba3 RUR
Possible
Upgrade
Ba3(hyb)
B1 RUR
Possible
Upgrade
Ba3(hyb)
(P)B1 RUR
Possible
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B1(hyb) RUR
Possible
Upgrade
B1(hyb) RUR
Possible
Upgrade
B2(hyb) RUR
Possible
Upgrade
B2(hyb) RUR
Possible
Upgrade
This publication does not announce a credit rating action. For any credit ratings referenced in this publication,
please see the ratings tab on the issuer/entity page on http://www.moodys.com for the most updated credit rating
action information and rating history.
© 2015 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and
affiliates (collectively, “MOODY’S”). All rights reserved.
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Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”),
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and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of
any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees
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section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a
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Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of
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consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ
are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are
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MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and
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and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.