Moody's Corporation today announced it will establish a $1 billion
commercial paper (CP) program during the week of October 8, 2007. The
CP program, which has been rated "A-1" by Standard & Poor's, is
supported by a five year, $1 billion revolving credit facility
(Revolver) negotiated with the company's relationship banks. The new
Revolver replaces the $500 million interim credit facility and $500
million revolving credit facility previously in place. The CP program
will be exempt from registration under the Securities Act of 1933.
The $1 billion CP program, its backup Revolver and the recently
announced $300 million private placement transaction are a
continuation of the changes the company has made in its capital
structure over the last two years. By continuing to replace equity
with debt in Moody's capital structure, the company will reduce its
cost of capital.
Over the last two years, Moody's has accelerated its share
repurchase program funded by cash balances and borrowings. In 2006,
Moody's repurchased $1.1 billion of shares and through the second
quarter of this year the company had repurchased $943 million of
shares.
"The new capital structure provides us with the financial
flexibility to continue efficiently returning capital to shareholders
through share repurchase while also supporting our corporate
development activities," said Raymond W. McDaniel, Jr., Chairman and
Chief Executive Officer of Moody's Corporation.
Below is a summary of the company's debt position as of September
30, 2007 (in millions):
-0-
*T
Capacity Outstanding
Short-term debt:
$1 Billion Revolver* $1,000 $400
Long-term debt:
4.98% Notes due 2015 $300 $300
6.06% Notes due 2017 $300 $300
Total $1,600 $1,000
* Outstanding borrowing under the new Revolver will be paid down as
commercial paper is issued.
*T
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995
Certain statements contained in this release are forward-looking
statements and are based on future expectations, plans and prospects
for Moody's business and operations that involve a number of risks and
uncertainties. The forward-looking statements and other information
are made as of October 1, 2007, and the Company disclaims any duty to
supplement, update or revise such statements on a going-forward basis,
whether as a result of subsequent developments, changed expectations
or otherwise. In connection with the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, the Company is
identifying certain factors that could cause actual results to differ,
perhaps materially, from those indicated by these forward-looking
statements. Those factors include, but are not limited to, matters
that could affect the volume of debt securities issued in domestic
and/or global capital markets, including credit quality concerns,
changes in interest rates and other volatility in the financial
markets; possible loss of market share through competition;
introduction of competing products or technologies by other companies;
pricing pressures from competitors and/or customers; the potential
emergence of government-sponsored credit rating agencies; proposed
U.S., foreign, state and local legislation and regulations;
regulations relating to the oversight of Nationally Recognized
Statistical Rating Organizations; possible judicial decisions in
various jurisdictions regarding the status of and potential
liabilities of rating agencies; the possible loss of key employees to
investment or commercial banks or elsewhere and related compensation
cost pressures; the outcome of any review by controlling tax
authorities of the Company's global tax planning initiatives; the
outcome of those tax and legal contingencies that relate to Old D&B,
its predecessors and their affiliated companies for which the Company
has assumed portions of the financial responsibility; the outcome of
other legal actions to which the Company, from time to time, may be
named as a party; the ability of the Company to successfully integrate
acquired businesses; a decline in the demand for credit risk
management tools by financial institutions; and other risk factors as
discussed in the Company's annual report on Form 10-K for the year
ended December 31, 2006 and in other filings made by the Company from
time to time with the Securities and Exchange Commission. The
securities to be offered by Moody's in any commercial paper program
will not be registered under the Securities Act of 1933 and may not be
offered or sold in the United States absent registration or an
applicable exemption from registration requirements. This press
release shall not constitute an offer to sell or the solicitation of
an offer to buy Moody's notes under its commercial paper program.
