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Revenue and Issuance Analysis

Illustrative Value of a Moody's Rating Example: 10 year $500 million corporate bond Unrated $500,000,000 Bond Rated by Moody's $500,000,000 x 4.3% Interest rate x 4.0% == $21,500,000 Annual interest payments = $20,000,000 × 10 years Tenor = = $215,000,000 Lifetime interest expense = × 10 years $200,000,000 $15 million in total interest expense VS. lifetime cost of a rating Note: Illustrative spread differential based on feedback from syndicate desks and FBR & Co. research on Moody's Corporation (January 2014) which stated that obtaining a Moody's rating typically saves approximately 30 basis points per year for investment grade issuers. Many factors go into the pricing of a bond. MOODY'S November 4, 2019 32

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