穆迪 (MCO) 2009 Q3 法說會逐字稿

Good day, and welcome, ladies and gentlemen, to the Moody's Corporation third quarter conference call.

At this time, I'd like to inform you that this conference is being recorded and that all participants are in a listen-only mode.

At the request of the Company, we will open the conference up for questions and answers following the presentation.

I will now turn the conference over to Liz Zale, Vice President Investor Relations.

Please go ahead.

Thank you.

Good morning, everyone, and thanks for joining us on this teleconference to discuss Moody's results for the third quarter of 2009.

I am Liz Zale, Vice President of Investor Relations.

Moody's released its results for the third quarter of 2009 this morning.

The earnings press release and a presentation to accompany this teleconference are both available on our website at IR.Moody's.com.

Ray McDaniel, Chairman and Chief Executive Officer of Moody's Corporation will lead this morning's conference call.

Also making prepared remarks on the call this morning is Linda Huber, Chief Financial Officer of Moody's Corporation.

Before we begin, I call your attention to the Safe Harbor language, which can be found toward the end of our earnings release.

Today's remarks may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

In accordance with the act, I also direct your attention to management's discussion and analysis section and the risk factors discussed in our annual report on Form 10-K for the year ended December 31, 2008, and in other SEC filings made by the Company, which are available on our website and on the Securities and Exchange Commission website.

These, together with the Safe Harbor statement set forth important factors that could cause actual results to differ materially from those contained in any such forward-looking statements.

I should point out that members of the media may be on the call this morning in a listen-only mode.

I'll now turn the call over to Ray McDaniel.

Thank you, Liz.

Good morning, and thank you to everyone for joining today's call.

I'll begin by summarizing Moody's third quarter and year to date 2009 results, and update our guidance for the year.

Linda will follow with additional financial detail and operating highlights, and I will then speak to recent developments in the legislative and regulatory area, and finish with further comments on Moody's outlook for 2009.

After our prepared remarks, we'll be happy to respond to your questions.

Moody's results in the third quarter reflected continuing strength in corporate debt issuance, as well as growth for Moody's analytics.

Total revenue was $452 million, up 4% year-over-year.

Excluding the unfavorable impact of foreign currency translation, revenue increased 6%.

Operating income for the third quarter was $173 million, a decline of 9% year-over-year, due to acquisition-related and other expenses.

There was negligible impact to operating income from foreign currency translation.

Diluted earnings per share for the quarter were $0.42, including a $0.01 charge associated with previously announced restructuring activities.

This was 9% below the prior year period.

Excluding restructuring adjustments from both periods and the benefit related to legacy tax matters in the prior year period, diluted EPS for the quarter of $0.43 were down 4% year-over-year.

Turning to our year-to-date performance, revenue for the first nine months of 2009 totaled $1.3 billion, a 3% decrease from the same period in 2008.

Operating income of $509 million was 18% lower than the prior year period.

Year-to-date diluted earnings per share of $1.26 included a net charge of $0.02 per share reflecting costs related to previously announced restructuring plans, partially offset by a benefit from certain legacy tax matters.

Excluding these items in both periods, diluted earnings per share declined by 11% to $1.28 from $1.44 in the first nine months of -- first nine months of 2008.

We are raising our full year 2009 EPS guidance to a range of $1.60 to $1.68 from the prior range of $1.45 to $1.55, primarily reflecting the strength of corporate debt issuance in the third quarter and our expectation to corporate bond activity will remain strong through year end.

I'll now turn the call over to Linda to provide further commentary on our results and other updates.

Thanks, Ray.

I'll begin with revenue at the corporate level.

As Ray mentioned, Moody's total revenue increased 4% in the third quarter over the prior year period.

Excluding the unfavorable impact of foreign currency translation, revenue grew 6%.

US revenue was up 5% to $230 million, while revenue outside the US rose by 3% to $222 million, and represented 49% of the total.

Recurring revenue of $285 million represented 63% of total revenue compared to 64% in the prior year period.

Looking at each of our businesses, Moody's investor service revenue for the quarter was $305 million, a 3% year-over-year increase.

Excluding the unfavorable impact of foreign currency translation, MIS revenue grew 5%.

US revenue was up 8% over the prior year period.

Outside of the US, revenue declined 2% from the prior year and represented 46% of total ratings revenue.

Global corporate finance revenue in the third quarter increased 32% from a year ago to $101 million.

Revenue grew 35% in the US, primarily due to high yield and investment grade bond issuance, as spreads continued to narrow.

Outside the US, revenue increased 27%, driven by investment grade and high yield activity in Europe, as well as increased cross-border issuance from Latin America.

Global structure finance revenue for the third quarter was $79 million, 17% below the prior year period.

US revenue decreased 8%, with new issuance limited primarily to TALF related securitizations.

Outside the US, structured finance revenue was down 24%, driven by revenue declines in derivatives and asset-backed securities.

Global financial institutions revenue of $63 million decreased 2% from the same quarter of 2008.

Year-over-year revenue declines of 4% in the US and 1% outside the US reflected ongoing weakness in banking sector issuance.

Global revenue for the public project and infrastructure finance business increased 4% year-over-year to $62 million.

Revenue decreased 2% in the US due to lower issuance in the municipal sector.

Non-US revenue grew 14% with strong issuance in European infrastructure finance.

Turning now to Moody's analytics, global revenue of $147 million was up 7% from the third quarter of 2008.

Excluding the unfavorable impact of foreign currency translation, revenue increased 10%.

US revenue of $65 million remained about flat with the third quarter of 2008.

Non-US revenue grew 14%, primarily due to the impact of acquisitions made in 2008 and represented 56% of total analytics revenue.

Globally, subscription revenue stayed about flat at $119 million, with new sales offsetting higher customer attrition, resulting from market disruptions in late 2008.

Software revenue grew 82% year-over-year, reflecting the impact of the Fermat acquisition while professional services revenue increased 9%.

Turning now to expenses, Moody's third quarter expenses were $279 million, 15% above the prior year period.

Excluding restructuring adjustments from both periods, expenses increased by 12%.

The increase was primarily driven by incremental expenses from businesses acquired in the fourth quarter of 2008 and higher accruals for incentive compensation reflecting the stronger full year outlook.

Without the favorable impact of foreign currency translation reported expense increased 18%.

Operating margin for the quarter was 38.2% or 39% excluding the restructuring charge.

Our effective tax rate for the quarter was 37.5% compared with 38.4% for the prior year period.

The decrease resulted primarily from higher proportion of taxable income generated internationally and lower tax jurisdictions.

I would like to turn now to an update on capital allocation and stock buybacks.

At quarter end, we had 1.4 billion of share repurchase authority remaining under the current program.

We remain committed to returning capital to shareholders in a manner that is consistent with maintaining sufficient liquidity.

As we discussed previously in the near term, we are maintaining our current dividend and curtailing systematic share repurchase.

However, we will continue to evaluate opportunistic share repurchases as market conditions warrant.

During the third quarter of 2009, Moody's did not repurchase shares and issued 200,000 shares under employee stock-based compensation plan.

Outstanding shares as of September 30, 2009, totaled $236.5 million, a 1% decrease from a year earlier.

At quarter end, Moody's had $1.3 billion of outstanding debt and approximately $450 million of additional debt capacity available under our revolving credit facility.

During the quarter, we used a portion of our cash flow to reduce short-term debt by approximately $50 million.

In total, we reduced short-term debt by $187 million for the first nine months of 2009 and expect to continue debt repayment in the fourth quarter.

The combination of debt repayment and growth in our cash position to $423 million has reduced our net debt by $364 million since year end 2008, and with that, I'll turn the call back over to Ray.

Thanks, Linda.

I'll start now with a brief update on legislative and regulatory developments.

We continued to communicate with oversight authorities at national, regional and global levels and expect increased levels of regulatory activity in the near term.

In the US, yesterday the house financial services committee approved a bill to enhance overnight of nationally recognized statistical rating organizations, or NRSROs.

The bill addresses topics such as increasing transparency and accountability, strengthening the management and disclosure of conflicts of interest, and further empowering the SEC's oversite of NRSROs.

The bill we be subject to further congressional debate as a component of the broader initiative for financial system reform.

In mid-September, the SEC adopted rules requiring additional disclosure of information, including rating histories, and removing certain references to NRSRO ratings from regulation.

They also voted to propose or repropose additional rules on topics including the disclosure of additional information, strengthening the compliance function, and removing references to ratings and other regulations.

Finally, the commission voted to issue a concept release seeking public comment about liability standards when a rating is used in connection with a registered offering.

We remain focused on playing a constructive part in the discussion of these issues with congress, the SEC, and other regulatory authorities and market participants.

In Europe, following the European parliamentary vote in favor of new rating agency regulation, we continued to consult with national authorities and the Committee of European Securities Regulators, or CESR on the specifics of implementation.

We expect the regulation will be in effect by the second half of 2010.

As we've discussed earlier, compliance efforts in Europe, the US, and elsewhere will entail investment and additional costs.

We currently expect to incur incremental expense in the range of 15 million to $25 million in 2010, as we respond to multiple legislative and regulatory initiatives.

The timing and amount of initial and ongoing costs remains uncertain, however, as it depends on the various effective dates and final form of regulation in the US and abroad.

Finally, as regulatory reviews take place in other jurisdictions, we will continue to advocate for globally consistent approaches that align with the G-20 statements and the International Organization of Securities Commissions, or IOSCO framework.

I would also like to comment briefly on recent allegations made by a couple of former Moody's employees.

First, an external investigation conducted by an independent law firm into various claims about CDOs raised by a former employee has now been completed.

The investigators found that the allegations were not supported by the facts and were without merit.

In fact, the investigator specifically concluded that in every instance, Moody's employees acted according to established policies and procedures.

These findings are consistent with Moody's previous internal compliance reviews.

Recent criticism by another former employee regarding Moody's process for monitoring our municipal securities ratings was equally unfounded.

We are confident in our monitoring process, which incorporates both qualitative analysis and quantitative tools.

The performance of Moody's municipal ratings have been outstanding throughout the credit crisis and our ratings continue to be well positioned.

I'll conclude this morning's prepared remarks by discussing our full year guidance.

Moody's outlook for 2009 is based on assumption about many macroeconomic and capital market factors.

Corporate and consumer borrowing, securitization, and the nature and impact of government-sponsored economic stabilization and stimulus initiatives.

There's an important degree of uncertainty surrounding these assumptions, and if actual conditions differ, Moody's results for the year may differ materially from our current outlook.

As mentioned earlier, we are revising our EPS guidance upward for the full year 2009 to a range of $1.60 to $1.68 due primarily to the continued recovery in corporate debt markets globally.

This outlook assumes foreign currency translation for the remainder of 2009 at exchange rates as of the end of the third quarter.

The Company now projects full year 2009 revenue to remain about flat with full year 2008.

Expectations for certain areas have changed bases on conditions specific to those sectors and geographies.

We expect recurring revenue to remain stable.

Full year 2009 expenses are now expected to increase in the high single-digit percent range.

We now project full-year 2009 operating margin in the high 30% range and an effective tax rate in the 37 to 38% range.

Our guidance assumes a seasonal increase in expenses related to the sales cycle for Moody's analytics, continued hiring in strategic areas of the business, and investments in technology and administrative processes in order to create a robust platform for future growth, and to meet perspective oversight requirements.

For the global MIS business, we now expect 2009 revenue to decline in the low single-digit percent range.

In the US, revenue is now expected to be about flat to full year 2008.

While non-US revenue is still projected to decrease in the mid single-digit percent range.

We now anticipate full-year 2009 growth in corporate finance revenue in the low 30% range reflecting our expectations of further improvement in secular grade issuance and continued investment grade activity.

Our revenue outlook for structured finance and financial institutions remains unchanged.

With projected decreases in the mid-20s and mid single-digit percent ranges respectively.

We now expect revenue in the public project and infrastructure finance sector to increase in the low single-digit percent range for full year 2009.

For Moody's analytics, we still anticipate full year 2009 revenue growth in the low single-digit percent range.

We now project the subscription revenue will be flat compared with full year 2008, while we continue to expect strong growth in software revenue, largely as a result of the Fermat acquisition.

Revenue in the small and professional services segment is expected to decline in the mid single-digit percent range.

We still project low single-digit percent range decline within the US and a high single-digit percent range growth outside the US for Moody's analytics revenue.

That concludes our prepared remarks.

Joining us for the question and answer session are Michel Madelain the Chief Operating Officer of Moody's Investor Service and Mark Almeida, President of Moody's Analytics.

We would be pleased to take any questions you have.

Thank you.

(Operator Instructions) We'll go first to Peter Appert at Piper Jaffray.

Ray, two questions for you.

One, it seems like there may be some very preliminary signs of life in the structured finance market in terms of some mortgage deals getting done.

Could you just comment on what you're seeing in the structured finance market specifically?

And related to that, too, just sort of pipeline going into the fourth quarter.

I know it's captured I guess in your guidance, but is there anything interesting in terms of the pipeline that you can share with us?

With respect to structured finance specifically, most of what we are seeing continues to be TALF related.

We, and we've been seeing about $10 billion a month in TALF related securitization.

Our revenue coming from that area in the third quarter was about the same as it was in the second quarter.

You're correct, there have been a couple of securitizations that have moved forward outside of TALF, this I think has been very much spread-driven and it's encouraging to see, but I don't think that we're seeing enough activity at this point that I would call it any kind of a strong trend in the return of securitization.

I really wouldn't expect to see that until later in 2010, after we have gotten through what will be, we hope and anticipate the peak in unemployment and stress on consumers for the asset-backed security sectors and the peak in corporate defaults for the, for examples of the collateralized loan obligation sector.

And Ray, there's commentary in the press today about, a variety of issues coming out unrated.

Can you just comment on that and what you're seeing in terms of any trend in that regard?

Sure.

The -- well, to go to the bottom line first, our coverage globally remains consistent with what it has been historically.

We have not seen any erosion in coverage or growth in unrated issuance as a percent of total issuance.

That being said, we have to be very attentive to whether we are providing good value and service to investors through the ratings and research that we offer so that this doesn't become a trend.

With respect to some of the names that I think were identified in the media, those, those names are not names that have moved from the rated to the unrated universe.

There are a handful of names globally that have never sought ratings and those names that were identified, I think fall into those categories.

Great, thank you.

And Linda, one other thing, my understand is there might have been some catchup bonus accrual expense in the third quarter.

Can you quantify how much that might have been?

Sure, Peter, you're correct.

On the back of about 10% stronger guidance for the full year and a view that revenue will be about flat to last year as opposed to where it had been, that it would be down somewhat, we did do a catchup in the third quarter.

Incentive compensation for the third quarter is 14% of total compensation and it's $25 million for this third quarter, which is up about $10 million from what we put up in the second quarter.

Thank you.

Next we'll move to Michael Meltz at JPMorgan.

Thank you.

On the regulatory side, I appreciate you quantifying the expected incremental step up.

Just talk a little bit about what is that, or what does that represent?

And is that -- I know cash out the door is cash out the door, but is it likely some of that's going to be capitalized in terms of systems you need, or is it mostly kind of people and consultants?

Sure, Michael, you're correct.

It is a combination of people and systems and the human resource we need is going to end up, I'm sure, being a combination of both compliance personnel and ratings personnel who are going to be working at least in some jurisdictions on a rotational basis in the future.

And so we'll have to do some additional hiring in that area.

On top of that are systems and technology enhancements that have to be made in various jurisdictions.

I'm sure some of that will be capitalizable, but I don't have a breakout of that for you.

And I should, I should underline my comment before that this, this range continues to be speculative, because we just aren't sure about what the final form of new regulation is going to look like in old jurisdictions or the pace at which it's going to have to be implemented.

So you're getting our best guess, but that's subject to change.

Michael, it's Linda.

I would add that we're building into this.

You see expenses were up in the third quarter and we do expect some of that to continue in the fourth quarter.

We had talked about the fact that we needed to increase some of our system capabilities to deal with some of these regulatory things.

So we've also been building into this as well as expecting more of the expense to occur in 2010.

But as Ray said, timing is uncertain and we can't tell you which quarters it will hit in because we don't have final rules yet.

Okay, and then just another one, sorry to waste a question on this, but Linda, can you give us the percent of each product line that's transactions for the quarter, please?

Sure.

It's not a waste of a question, no problem.

We'll go through structured finance first, transaction revenue for the third quarter 2009 was 43% of the total and 57% was relationship.

For the corporate finance group because of the very heavy issuance activity, 63% transactional and 37% relational -- relationship, excuse me.

For financial institutions group, 27% transactions and 73% relationship.

For PPIF, 57% transactions and 43% relationship, so the total for Moody's investor service, 49% transaction, 51% relationship.

Of course with Moody's analytics, we see a much heavier skew towards relationship and subscription revenues, so we have 12% transaction and 88% relationship.

And for the Company as a whole, third quarter 2009 we have 37% transaction-driven revenues and 63% relation-driven revenues.

It's pretty close to where we were in the second quarter of 2009, which for the Company was 38% transaction and 62% relationship.

So relatively, relatively steady there.

Got it, thank you.

And then my last question, on the buyback side, can you just talk a little bit more about -- I understand the vernacular, you'll be opportunistic, but you're focused on debt paydown.

At what point, given the bounceback in transaction volumes and you've been able to keep margins pretty steady, what is going to be the inflection point to make you start thinking more aggressively about repurchase, especially at current levels?

Well, as we said, we're going to look at market conditions and see what happens going forward, Michael.

Obviously we would hope to buy back the stock at the right time and I think that would be driven by, if we see a significant market dislocation, if we see a, what we view as an incorrect interpretation of circumstances, then some conditions like that might cause us to get back into the market.

And I think more broadly also, in thinking not only about the opportunistic, but systematic share repurchase, that is going to importantly include the degree of improvement in overall credit market conditions, access to credit, the amount of liquidity that we feel is prudent to have on hand is subject to the environment in which we are operating.

So it's -- I don't think, I don't think we could put a specific number on it, but those are the variables we're looking at.

Okay.

Thanks for your time.

Thank you.

(Operator Instructions) We'll go next to John Neff with William Blair.

Quick question, just on some of the legal history.

Has Moody's ever lost or settled a lawsuit?

And is it a situation where -- what's your view on Moody's ability to afford to settle, let alone lose even a single lawsuit?

Is it something that you could do and carry on with the business or would it kind of set off some sort of domino effect?

Well, the -- to answer the first part of your question, no.

We have never lost a ratings-related lawsuit, and we have never settled a ratings-related lawsuit.

With respect to litigation, obviously we would rather see less of it than more of it.

We feel very comfortable and confident about our legal position on the merits, and we are not concerned that we are going to have a litigation loss, but there are obviously costs to the litigation and those are, are an increasing part of our expense bases, as we have had an increase in litigation this year.

So we've got to get to a point where some of these cases are dismissed and that's going to pull the litigation cost back in.

And is there any expectation as to -- you had some favorable, I thought, rulings in regards to the Abu Dhabi lawsuit.

I realize it's the legal system, but any sense of timing as to when you might get preliminary rulings or movement in some of the other suits?

I'm, I am told repeatedly by our legal counsel that it can be very unpredictable.

They, they -- point out correctly that we are subject to the court's calendar and how quickly the court wants to move forward in any of these litigations.

So unfortunately, I can't give you an estimate that I think would be anything more than just a plain guess.

In relation to the litigation risk, any surprises out of the House Finance Committee bill that was passed?

They seem to be -- they seem to be taking the stance so far that increased legal liability forced upon you by regulation might be advisable.

I think the, I think the debate in congress is looking at, rather than looking at liability, I think it's starting from the premise of how do we make sure there is proper -- there are proper levels of accountability for the industry, and then they look, the process looks for ways to identify accountability and to assign that to the industry.

Liability is one potential part of that.

There are obviously reasons why we believe that an enhanced liability standard for this industry would not contribute to investor protection or to the independence and stability of our ratings.

So we continue to make those points and we are -- I'm confident that we are going to end up with a standard that is workable and that we are going to have proper levels of accountability.

Linda, maybe two quick questions more.

Could you give us the employee head count at the end of the quarter, number one?

And also, can you -- is there any incremental CapEx that you're thinking of for compliance under the new regulatory regime?

Taking the first question first, total head count at the end of Q3 was about 3900 people, which is just about flat from where we were at the end of the second quarter.

We had a bit of a pop-up at the end of last year because we acquired a little bit less than 300 people with the Fermat acquisition.

So we're about flat on head count and that's where we expect to end the year.

Capital expenses more relate to some of the IT systems that we're building, some of which have overlapped with compliance, John, and some of which are just being used to improve the efficiency of our system for the analyst and our ability to track our processes going all the way from ratings through billings.

I'm not sure we would identify any particular CapEx for this, but I think it's fair to say as you have seen that our CapEx has moved a little bit and that will continue.

But again, we're not a heavy CapEx sort of Company and we will not be in the future.

Thanks very much.

Next, we'll go to Edward Atorino at Benchmark.

Hi, good afternoon -- well, yes, it's good afternoon.

Three questions, one, if you took out the 15 million or $20 million of new expenses I guess, what would be sort of the underlying cost inflation for Moody's 2010, number one?

Number two, with the surge in corporate finance this year, is -- do you think it might have borrowed a little, quote, unquote, from the 2010?

Which leads me to my final question.

I might have missed this because I got on late.

Could you sort of give us your view from on high in 2010 in terms of issuance excluding structured finance, which nobody knows what's going on?

Sure.

Let me answer the second parts of your question, Ed, and then maybe I can ask Linda to help out with your first question you raised.

In terms of 2010 market outlook, I can tell you what we are looking at I think better than I can tell you what those conditions are going to be at this point in time.

And I think we are looking at a reduced level of corporate defaults in 2010 versus 2009.

That should be beneficial towards bringing credit spreads in further, which would be beneficial for issuance.

I do think that there has probably been some pull-forward of 2010 refinancing into 2009.

That's clear.

But I also think there is an opportunity to bring forward 2011 refinancing into 2010.

And I think the prefinancing opportunities, if conditions are conducive to issuing at attractive rates, are going to be there.

There is plenty of debt in the pipeline to be refinanced and there are questions about timing and when those windows of opportunity will exist.

But the stock of outstanding debt that needs to be refinanced and prefinanced is large -- that's both in the corporate sector and in the financial institution sector.

I don't think we can expect investment grade issuance in 2010 to outpace what we've seen in 2009, but I think growth in the corporate sector would probably be more reliant on high yield activity in 2010, and again, there is a significant amount of refinancing that can occur.

We've also seen some activity in the mergers and acquisitions area, which we were not seeing earlier this year.

If that continues in 2010, that would be beneficial.

You've heard my remarks outside of the corporate and banking area before on securitization, and I think those, those remarks would remain as they have been.

At best, I think we're looking out into mid year to see any real return in parts of the structured finance market.

It would probably be after peaking of unemployment and stress on consumers associated with unemployment and increased confidence about the securities that are backed by either consumer loans or corporate loans in the CLO area and I think there are some other areas of structured finance that are going to continue to struggle but hose would be the first areas I think we would look for any kind of meaningful recovery.

And I think it's still a little ways off.

Let me turn to Linda on the other matter.

Ed, I think the number that Ray quoted and that we had in the script for the potential regulatory increase is actually 15 million to $25 million.

Oh, okay.

Close.

So you're close.

I think we would say we haven't given guidance yet on 2010 and we won't do that until February, but I think directionally, you probably look at a little bit of expense growth.

For example, if the business continues to do better and we're encouraged by what we've seen, we might hope to restore our bonus funding back to a full 100%.

At this point, the best we can guess is that may be a 20 million to $25 million stepup, given that we've seen improvement at the end of this year, things are looking better, so that number is not as large as it was as we had commented on in the second quarter.

So also we would expect we will continue to invest appropriately to support a business, which is still growing nicely, and so we would expect maybe, some growth, but we're pretty modest about expense increases around here.

Two more quickies.

Are the emerging markets big enough to start moving the top line?

And second, do you think you can see a 40% margin in the future fairly soon?

Well, the emerging markets collectively, yes, are certainly large enough to I think be interesting to shareholders.

And we have obviously activities in the emerging markets not only on the rating agency side of the business, but on Moody's analytics side of the business and that's an important component of Moody's analytics.

The domestic emerging markets are generally captured, or in many cases, are captured by ratings activity and research that is produced by afilliates of Moody's.

We don't have majority ownership in all cases or 100% ownership in all cases, so that is something of a mitigant to emerging market growth.

Nonetheless we are in those markets through affiliates and that is beneficial to the firm overall.

The 40% margin, yes, if we have -- if we have some normalization of credit market activity, I think that is achievable.

Thank you.

And the number specifically third quarter on a pro forma basis were at 39 for the third quarter and year to date, we're running 40.2, so we're there.

Okay.

Thank you.

And that does conclude our question and answer session.

At this time, I would like to turn the conference back over to Ray McDaniel for any closing remarks.

I just want to thank everyone for joining us this morning and we look forward to speaking to you again after the next quarter.

Thank you.

And this concludes Moody's third quarter earnings call.

As a reminder, a replay of this call will be available after 4:00 PM Eastern Time on Moody's website.

Thank you.