Document:

EX-4.1

Exhibit 4.1

GENERAL MILLS, INC.

OFFICERS’ CERTIFICATE

AND

AUTHENTICATION ORDER

Pursuant to the Indenture, dated as of February 1, 1996 (as amended, the “Indenture”), between
General Mills, Inc. (the “Company”) and U.S. Bank National Association (formerly known as First
Trust of Illinois, National Association), as trustee (the “Trustee”), and resolutions adopted by
the Board of Directors of the Company and the Finance Committee of the Board of Directors of the
Company, this Officers’ Certificate and Authentication Order is being delivered to the Trustee to
establish the terms of a series of Securities in accordance with Section 301 of the Indenture, to
establish the form of the Securities of such series in accordance with Section 201 of the
Indenture, to request the authentication and delivery of the Securities of such series pursuant to
Section 303 of the Indenture and to comply with the provisions of Section 102 of the Indenture.

Capitalized terms used but not defined herein and defined in the Indenture shall have the
respective meanings ascribed to them in the Indenture.

A. Establishment of Series Pursuant to Section 301 of Indenture. There is hereby established
pursuant to Section 301 of the Indenture a series of Securities which shall have the following
terms (the numbered clauses set forth below correspond to the numbered subsections of Section 301
of the Indenture):

(1) The series of Securities being authorized shall bear the title “3.200% Notes due
2027” (the “Notes”).

(2) There shall be no limit upon the aggregate principal amount of the Notes which may
be authenticated and delivered under the Indenture; provided, however, that the aggregate
principal amount of Notes to be authenticated and delivered under the Indenture pursuant to
this Officers’ Certificate and Authentication Order shall be limited to the amount set forth
in Section C below (except for Notes authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305,
306, 906 or 1107 of the Indenture and except for any Notes which, pursuant to Section 303 of
the Indenture, are deemed never to have been authenticated and delivered under the
Indenture).

(3) Interest on each Note will be paid to the Person in whose name the Note is
registered at the close of business on the Regular Record Date (as defined in paragraph 5
below), except that interest due at Maturity will be paid to the Person to whom the
principal of the Note is paid.

(4) The Notes will mature on February 10, 2027, unless the principal of any Note, or
any installment of principal, becomes due and payable prior to such date. If the date of
Maturity of a Note is not a Business Day, the payment due on such day shall be made on the
next succeeding Business Day and no additional interest shall accrue for the period from
Maturity to that next succeeding Business Day.

(5) Each Note will bear interest from and including January 17, 2017 or from and
including the most recent Interest Payment Date (as defined below) as to which interest on
such Note (or any Predecessor Security with respect to such Note) has been paid or made
available for payment at an annual rate of 3.200% until the principal of the Note is paid or
made available for payment. Each payment of interest on a Note will include interest to,
but excluding, as the case may be, the relevant Interest Payment Date or Maturity.

The “Interest Payment Dates” for the Notes will be February 10 and August 10 of each
year beginning on August 10, 2017 and the Regular Record Dates will be the February 1 or
August 1, respectively, next preceding such Interest Payment Date whether or not a Business
Day. If any Interest Payment Date is not a Business Day, the payment due on such day shall
be made on the next succeeding Business Day and no additional interest shall accrue for the
period from such Interest Payment Date to that next succeeding Business Day.

Interest (including interest for partial periods) will be calculated on the basis of a
360-day year of twelve 30-day months.

(6) Payment of principal of and premium (if any) and interest on each Note that is
represented by a Global Security will be made to the Depositary (as specified in paragraph
16 below) or its nominee, as the case may be, as the sole registered owner and the sole
Holder of the Notes represented thereby for all purposes under the Indenture.

Payment of principal of and premium (if any) and interest on each Note that is not
represented by a Global Security will be made upon presentation and surrender of such Note
at the office or agency maintained by the Company for that purpose in the Borough of
Manhattan, the City of New York (which shall initially be the office of the Trustee).
Registered Holders that wish to receive payment in immediately available funds must provide
appropriate written wire transfer instructions sufficiently in advance of the payment date
and present the Note in time for the party making the payment to make payments in such funds
in accordance with its normal procedures. Any wire transfer instructions received by a
party making payments shall remain in effect until revoked by the registered Holder.
Payment in accordance with written wire transfer instructions from a registered Holder shall
be deemed to constitute full and complete payment of all amounts so paid. The Company may,
at its option, elect to make payments of interest other than at Maturity by check mailed to
the address of the registered Holder thereof as of the close of business on the relevant
Regular Record Date as such address appears in the Security Register.

The “Place of Payment” with respect to the Notes shall be the City of New York.

(7) The Company may redeem the Notes, in whole or in part, at its option at any time or
from time to time. The Redemption Price for the Notes being redeemed on any Redemption Date
that is prior to November 10, 2026 (the date that is three months prior to the Maturity of
the Notes) will be equal to the greater of (i) 100% of the principal amount of the Notes
being redeemed on the Redemption Date and (ii) as determined by the Quotation Agent (as
defined below), the sum of the present values of the remaining scheduled payments of
principal and interest on the Notes being redeemed on the Redemption Date (not including any
portion of such payments of interest accrued as of the Redemption Date) discounted to the
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months or in the case of an incomplete month, the number of days elapsed) at the Adjusted
Treasury Rate (as defined below) plus 15 basis points, plus, in the case of both (i) and
(ii) above, accrued and unpaid interest on the Notes to but excluding the Redemption Date.
The Redemption Price for the Notes being redeemed on any Redemption Date that is on or after
November 10, 2026 (the date that is three months prior to the Maturity of the Notes) will be
equal to 100% of the principal amount of the Notes being redeemed on the Redemption Date,
plus accrued and unpaid interest on the Notes to but excluding the Redemption Date.
Notwithstanding the foregoing, installments of interest on Notes that are due and payable on
Interest Payment Dates falling on or prior to a Redemption Date will be payable on the
Interest Payment Date to the Holders as of the close of business on the relevant Regular
Record Date. Notice of redemption will be given to the registered Holders of the Notes to
be redeemed not less than 15 nor more than 45 days prior to the Redemption Date, which date
and the applicable Redemption Price will be specified in the notice. Once notice of
redemption is mailed, the Notes or any portion of the Notes called for redemption will
become due and payable on the Redemption Date and at the applicable Redemption Price, plus
accrued and unpaid interest to, but excluding, the Redemption Date. On and after the
Redemption Date, interest will cease to accrue on the Notes or any portion of the Notes
called for redemption (unless the Company defaults in the payment of the Redemption Price
and accrued interest). On or before the Redemption Date, the Company will deposit with a
Paying Agent (or the Trustee) money sufficient to pay the Redemption Price of and accrued
interest on the Notes or any portion of the Notes to be redeemed on that date. For purposes
of the foregoing: (a) “Adjusted Treasury Rate” means, with respect to any Redemption Date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue (as defined below), calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury
Price (as defined below) for such Redemption Date; the Adjusted Treasury Rate shall be
calculated on the third Business Day preceding the Redemption Date; (b) “Comparable Treasury
Issue” means the United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the remaining term of the Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the remaining term
of the Notes; (c) “Comparable Treasury Price” means, with respect to any Redemption Date,
the average of the Reference Treasury Dealer Quotations (as defined below) for such
Redemption Date; (d) “Quotation Agent” means the Reference Treasury Dealer (as defined
below) appointed by the Trustee after consultation with the Company; (e) “Reference Treasury
Dealer” means any primary U.S. government securities dealer in the United States selected by
the Trustee after consultation with the Company; (f) “Reference Treasury Dealer Quotations”
means, with respect to each Reference Treasury Dealer and any Redemption Date, the average,
as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in writing to the
Trustee by such Reference Treasury Dealer at 5:00 p.m. in the City of New York on the third
Business Day preceding such Redemption Date.

(8) If a Change of Control Triggering Event (as defined in the form of Note attached
hereto as Exhibit A) shall have occurred, Holders of the Notes may require the Company to
repurchase all or any part of the Notes in the manner provided and subject to the
limitations set forth in the form of Note attached hereto as Exhibit A.

(9) The Notes shall be issuable in denominations of $2,000 and integral multiples of
$1,000 in excess thereof.

(15) The Notes shall be defeasible, in whole or any specified part, pursuant to Section
1302 or Section 1303 of the Indenture or both such Sections.

(16) The Notes shall be issuable in whole or in part in the form of one or more Global
Securities registered in the name of the Depositary or its nominee. The Depositary with
respect to such Global Securities shall be The Depository Trust Company. The Global
Securities shall bear the legends set forth on the form of Note attached hereto as Exhibit
A. Such Global Security may not be exchanged in whole or in part for Securities registered,
and no transfer of such Global Security in whole or in part may be registered, in the name
or names of Persons other than the Depositary for such Global Security or a nominee thereof,
unless (a) the Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or if at any time the Depositary ceases to be a clearing
agency registered under the Securities Exchange Act of 1934, as amended, and, in either
case, the Company does not appoint a successor Depositary within 90 days after receiving
that notice or becoming aware that the Depositary is no longer so registered, (b) the
Company executes and delivers to the Trustee a Company Order that such Global Security shall
be so exchangeable or (c) an Event of Default with respect to such Global Security has
occurred and is continuing, and the Depositary requests the issuance of Securities
registered in the name or names of Persons other than the Depositary for such Global
Security or a nominee thereof. So long as the Depositary or its nominee is the registered
holder of any Global Security, the Depositary or its nominee, as the case may be, will be
considered the sole Holder of the Notes represented by such Global Security for all purposes
under the Notes and the Indenture.

B. Establishment of Form of Securities Pursuant to Section 201 of the Indenture. In
accordance with Section 201 of the Indenture, the form attached hereto as Exhibit A is hereby
established as the form to represent the Notes.

C. Order for the Authentication and Delivery of Securities Pursuant to Section 303 of the
Indenture. Pursuant to Section 303 of the Indenture, you are hereby requested, as Trustee under
the Indenture, to authenticate, in the manner provided by the Indenture, $750,000,000 aggregate
principal amount of the Notes registered in the name of Cede & Co., which Notes have been
heretofore duly executed by the proper officers of the Company and delivered to you as provided in
the Indenture, and to deliver said authenticated Notes to Barclays Capital Inc. through the
facilities of The Depository Trust Company against payment therefor on January 17, 2017.

D. Certification Pursuant to Section 102 of the Indenture. Each of the undersigned has read
the pertinent sections of the Indenture, including Sections 201, 301 and 303 thereof and the
definitions in the Indenture relating thereto, and certain other corporate documents and records.
In the opinion of each of the undersigned, the undersigned has made such examination or
investigation as is necessary to enable the undersigned to express an informed opinion as to
whether or not the conditions precedent to (i) the establishment of (a) a series of Securities and
(b) the form of such Securities and (ii) the issuance, authentication and delivery of such series
of Securities contained in the Indenture have been complied with. In the opinion of the
undersigned, all conditions precedent to (x) the establishment of the Notes and the form of the
Notes and (y) the issuance, authentication and delivery of the Notes have been complied with.

Insofar as this Officers’ Certificate and Authentication Order relates to legal matters, it is
based upon the Opinion of Counsel delivered by the Company to the Trustee contemporaneously
herewith.

[Remainder of Page Intentionally Blank]

1

IN WITNESS WHEREOF, the undersigned have hereunto signed our names on behalf of the Company.

Dated: January 17, 2017

GENERAL MILLS, INC.

By /s/ Donal L. Mulligan

Donal L. Mulligan

Its Executive Vice President, Chief Financial Officer

By /s/ Keith A. Woodward

Keith A. Woodward

Its Senior Vice President, Treasurer

CERTIFICATION

I, Chris A. Rauschl, an Assistant Secretary of the Company, do hereby certify that Donal L.
Mulligan is on the date hereof the duly elected or appointed Executive Vice President and Chief
Financial Officer of the Company and the signature set forth above is his own true signature, and
further certify that Keith A. Woodward is on the date hereof the duly elected or appointed Senior
Vice President and Treasurer of the Company and the signature set forth above is his own true
signature.

/s/ Chris A. Rauschl

Chris A. Rauschl

Assistant Secretary

EXHIBIT A

REGISTERED NO. PRINCIPAL AMOUNT: $

GENERAL MILLS, INC.

3.200% NOTES DUE 2027

CUSIP NO. 370334 BZ6 ISIN No. US370334BZ69 Common Code No. 155102365

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED
IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

GENERAL MILLS, INC., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the “Company,” which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &CO., or registered
assigns, the principal sum of            Dollars (U.S. $ ) on February 10,
2027 (the “Maturity Date”), and to pay interest thereon from and including January 17, 2017 or the
most recent Interest Payment Date (as defined below) as to which interest has been paid or made
available for payment, semiannually in arrears on February 10 and August 10 in each year (each an
“Interest Payment Date”), commencing on August 10, 2017, at the rate of 3.200% per annum until the
principal hereof has been paid or duly made available for payment. Interest (including interest
for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months.
Each payment of interest hereon will include interest to, but excluding, as the case may be, the
relevant Interest Payment Date or Maturity.

The interest so payable, and punctually paid or made available for payment, on any Interest
Payment Date will, as provided for in the Indenture, be paid to the Person in whose name this Note
(or one or more Predecessor Securities with respect hereto) is registered at the close of business
on the Regular Record Date for such Interest Payment Date, which shall be the February 1 or August
1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date;
except that interest due at Maturity will be paid to the Person to whom the principal is paid. Any
such interest not so punctually paid or made available for payment will forthwith cease to be
payable to the Person in whose name this Note (or one or more Predecessor Securities with respect
hereto) is registered at the close of business on such Regular Record Date and may either be paid
to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to the Holder of this Note not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

Payment of principal of and premium (if any) and interest on this Note will be made to The
Depository Trust Company or its nominee, as the case may be, as the sole registered owner and the
sole Holder of the Note represented hereby for all purposes under the Indenture.

The “Place of Payment” with respect to this Note shall be the City of New York.

All payments on this Note will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts.

Any payment on this Note due on a day that is not a Business Day will be made on the next
succeeding Business Day with the same force and effect as if made on the due date and no additional
interest shall accrue for the period from and after such date.

Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall have the same effect as though fully set forth in this
place.

Unless the certificate of authentication hereon has been executed by or on behalf of the
Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed and has caused
a facsimile of its corporate seal to be affixed hereto or imprinted hereon.

Dated: January 17, 2017

	 	 	 	 	 
	TRUSTEE’S CERTIFICATE OF AUTHENTICATION	 	GENERAL MILLS, INC.
	This is one of the Securities

of the series designated herein

referred to in the within-mentioned

Indenture.

	 	

By:
	 	

	
 
	 	 	 	 
	
 
	 	 	 	Keith A. Woodward

Its Senior Vice President, Treasurer

U. S. BANK NATIONAL ASSOCIATION, as Trustee

	 	 	 
	 	 	Attest:

	 	 	 

	By:      

Authorized Officer
	 	Chris A. Rauschl

Its Assistant Secretary

	OR
	 	

	     
	 	[SEAL]

as Authenticating Agent for the Trustee

By:      

Authorized Officer

2

[REVERSE OF NOTE]

GENERAL MILLS, INC.

3.200% NOTES DUE 2027

This Note is one of a duly authorized issue of securities of the Company (herein called the
“Securities”), issued and to be issued in one or more series under an Indenture, dated as of
February 1, 1996 (herein called the “Indenture”, which term shall have the meaning assigned to it
in such instrument), between the Company and U.S. Bank National Association (f.k.a. First Trust of
Illinois, National Association), as Trustee (herein called the “Trustee”, which term includes any
successor trustee under the Indenture), and reference is hereby made to the Indenture and all
indentures supplemental thereto for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and
of the terms upon which the Securities are, and are to be, authenticated and delivered. By the
terms of the Indenture, additional Securities of other separate series, which may vary as to date,
amount, Stated Maturity, interest rate or method of calculating the interest rate and in other
respects as therein provided, may be issued in an unlimited principal amount. This Note is one of
a series of the Securities designated as 3.200% Notes due 2027 (the “Notes”).

In case an Event of Default with respect to the Notes shall have occurred and be continuing,
the unpaid principal hereof may be declared, and upon such declaration shall become, due and
payable in the manner, with the effect and subject to the conditions provided in the Indenture.

The Company may at its option redeem this Note in whole or from time to time in part at the
Redemption Price set forth below; provided that the principal amount of this Note remaining
outstanding after a redemption in part shall be $2,000 or an integral multiple of $1,000 in excess
thereof. The Company may exercise such option by mailing or causing the Trustee to mail a notice
of such redemption at least 15 but not more than 45 days prior to the Redemption Date. In the
event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. If less than
all of the Securities with like tenor and terms to this Note are to be redeemed, the Securities to
be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and
appropriate. The Company shall notify the Trustee of the Redemption Price promptly after the
calculation thereof, and the Trustee shall not be responsible for such calculation.

The Redemption Price for the Notes to be redeemed on any Redemption Date that is prior to
November 10, 2026 will be equal to the greater of (i) 100% of the principal amount of this Note to
be redeemed and (ii) as determined by the Quotation Agent (as defined below), the sum of the
present values of the remaining scheduled payments of principal and interest on the Notes to be
redeemed (excluding any portion of such payments of interest accrued as of the Redemption Date)
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months or in the case of an incomplete month, the number of days elapsed) at the
Adjusted Treasury Rate (as defined below) plus 0.15%, plus, in the case of both (i) and (ii),
accrued and unpaid interest to the Redemption Date. The Redemption Price for the Notes to be
redeemed on any Redemption Date that is on or after November 10, 2026 will be equal to 100% of the
principal amount of the Notes being redeemed on the Redemption Date, plus accrued and unpaid
interest on the Notes to the Redemption Date. Unless the Company defaults on the payment of the
Redemption Price, on and after the Redemption Date interest will cease to accrue on the principal
amount of the Notes to be redeemed.

“Adjusted Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (as defined
below), calculated using a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price (as defined below) for such Redemption
Date. The Adjusted Treasury Rate shall be calculated on the third Business Day preceding the date
of redemption.

“Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of this Note to be redeemed
that would be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable maturity to the
remaining term of this Note.

“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the
Reference Treasury Dealer Quotations (as defined below) for such Redemption Date.

“Quotation Agent” means the Reference Treasury Dealer (as defined below) appointed by the
Trustee after consultation with the Company.

“Reference Treasury Dealer” means any primary U.S. government securities dealer in the United
States selected by the Trustee after consultation with the Company.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. in the City of New
York on the third Business Day preceding such Redemption Date.

If a Change of Control Triggering Event shall have occurred, the Holder of this Note may
require the Company to repurchase all or any part (equal to an integral multiple of $1,000) of this
Note at a purchase price equal to 101% of the principal amount of, plus accrued and unpaid
interest, if any, to the date of purchase on, the Note (or part thereof) to be purchased (unless
the Company shall have mailed or caused to be mailed a notice of redemption within 30 days after
such Change of Control Triggering Event stating that all of the Notes will be redeemed); provided
that the principal amount of this Note remaining outstanding after a repurchase in part shall be
$2,000 or an integral multiple of $1,000 in excess thereof. Within 30 days after any Change of
Control Triggering Event, the Company shall mail or cause the Trustee to mail a notice describing
the transaction or transactions constituting the Change of Control Triggering Event and offering to
repurchase the Notes. Such repurchase must occur no earlier than 30 days and no later than 60 days
after the date such notice is mailed.

On the date specified for repurchase of the Notes, the Company shall, to the extent lawful:

	 	•	 	accept for payment all Notes or portions of Notes properly tendered pursuant to the
offer to repurchase the Notes;

	 	•	 	deposit with the Paying Agent the required payment for all Notes or portions of Notes
properly tendered pursuant to the offer to repurchase the Notes; and

	 	•	 	deliver to the Trustee the repurchased Notes, accompanied by an Officers’ Certificate
stating the aggregate principal amount of Notes repurchased pursuant to the offer to
repurchase the Notes.

The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act
of 1934, as amended, and any other securities laws and regulations applicable to the repurchase of
the Notes. To the extent that these securities laws and regulations conflict with the provisions
of this Note requiring repurchase of the Notes upon a Change of Control Triggering Event, the
Company shall comply with these securities laws and regulations instead of the repurchase
provisions of this Note, and the Company will not be considered to have breached its obligation to
repurchase the Notes. Additionally, if an Event of Default unrelated to the repurchase provisions
of this Note exists under the Indenture, including Events of Default arising with respect to other
issues of Securities, the Company shall not be required to repurchase the Notes, notwithstanding
the repurchase provisions of this Note.

The Company shall not be required to comply with obligations relating to repurchase of the
Notes upon a Change of Control Triggering Event if a third party satisfies such obligations.

“Change of Control” means the occurrence of any of the following: (a) the consummation of any
transaction (including, without limitation, any merger or consolidation) resulting in any “person”
(as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended)
(other than the Company or one of its subsidiaries) becoming the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of more than 50% of the Company’s Voting Stock or other Voting Stock into which the
Company’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting
power rather than number of shares; (b) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in a transaction or a series of related
transactions, of all or substantially all of the assets of the Company and its subsidiaries, taken
as a whole, to one or more Persons (other than the Company or one of its subsidiaries); or (c) the
first day on which a majority of the members of the Board of Directors of the Company are not
Continuing Directors. Notwithstanding the foregoing, a transaction will not be considered to be a
Change of Control if (a) the Company becomes a direct or indirect wholly-owned subsidiary of a
holding company and (b)(y) immediately following such transaction, the direct or indirect holders
of the Voting Stock of the holding company are substantially the same as the Holders of the
Company’s Voting Stock immediately prior to such transaction or (z) immediately following such
transaction no Person is the beneficial owner, directly or indirectly, of more than 50% of the
Voting Stock of the holding company.

“Change of Control Triggering Event” means the occurrence of both a Change of Control and a
Rating Event.

“Continuing Directors” means, as of any date of determination, any member of the Company’s
Board of Directors who (a) was a member of the Board of Directors on January 17, 2017 or (b) was
nominated for election, elected or appointed to the Board of Directors with the approval of a
majority of the Continuing Directors who were members of the Board of Directors at the time of such
nomination, election or appointment (either by a specific vote or by approval of a proxy statement
of the Company in which such member was named as a nominee for election as a director, without
objection to such nomination).

“Fitch” means Fitch Ratings.

“Investment Grade Rating” means a rating equal to or higher than BBB– (or the equivalent) by
Fitch, Baa3 (or the equivalent) by Moody’s and BBB– (or the equivalent) by S&P, and the equivalent
investment grade credit rating from any replacement Rating Agency or Rating Agencies selected by
the Company.

“Moody’s” means Moody’s Investors Service, Inc.

“Rating Agencies” means (a) each of Fitch, Moody’s and S&P; and (b) if any of Fitch, Moody’s
or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for
reasons outside of the Company’s control, a “nationally recognized statistical rating
organization’’ (as defined in Section 3(a)(62) of the Securities Exchange Act of 1934, as amended)
selected by the Company as a replacement Rating Agency for a former Rating Agency.

“Rating Event” means the rating on the Notes is lowered by each of the Rating Agencies and the
Notes are rated below an Investment Grade Rating by each of the Rating Agencies on any day within
the 60-day period (which 60-day period will be extended so long as the rating of the Notes is under
publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the
earlier of (a) the occurrence of a Change of Control and (b) public notice of the occurrence of a
Change of Control or the Company’s intention to effect a Change of Control; provided that a Rating
Event will not be deemed to have occurred in respect of a particular Change of Control (and thus
will not be deemed a Rating Event for purposes of the definition of Change of Control Triggering
Event) if each Rating Agency making the reduction in rating does not publicly announce or confirm
or inform the Trustee in writing at the request of the Company that the reduction was the result,
in whole or in part, of any event or circumstance comprised of or arising as a result of, or in
respect of, the Change of Control (whether or not the applicable Change of Control has occurred at
the time of the Rating Event).

“S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc.

“Voting Stock” means, with respect to any specified person (as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) as of any date, the capital stock of
such person that is at the time entitled to vote generally in the election of the board of
directors of such person.

The Company may, without the consent of the Holders of the Notes, issue additional Securities
having the same ranking and the same interest rate, maturity and other terms as the Notes (except
for the public offering price and issue date and, in some cases, the first interest payment date).
Any additional Securities having the same terms, together with these Notes, will constitute a
single series of Notes under the Indenture; provided that, if the additional Securities are not
fungible with these Notes for U.S. federal income tax purposes, the additional Securities will have
a different CUSIP number. No such additional Securities having the same ranking and the same
interest rate, maturity and other terms as the Notes (except for the public offering price and
issue date and, in some cases, the first interest payment date) may be issued if an Event of
Default has occurred with respect to these Notes.

The Indenture contains provisions for defeasance at any time of either the entire principal of
the Notes or of certain covenants and Events of Default with respect to the Notes, in either case
upon compliance by the Company with certain conditions set forth in the Indenture.

This Global Security is exchangeable for definitive Notes only if (x) the Depositary notifies
the Company that it is unwilling or unable to continue as Depositary for this Global Security or if
at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange
Act of 1934, as amended, and, in either case, the Company does not appoint a successor Depositary
within 90 days after receiving that notice or becoming aware that the Depositary is no longer so
registered, (y) the Company executes and delivers to the Trustee a Company Order that this Global
Security shall be so exchangeable or (z) an Event of Default with respect to the Notes represented
hereby has occurred and is continuing and the Depositary requests the issuance of definitive Notes.
In such case, this Global Security shall be exchangeable into Notes issuable only in denominations
of $2,000 and integral multiples of $1,000 in excess thereof. No Notes shall be issuable in
denominations of less than $2,000. If this Global Security is exchangeable pursuant to the
preceding sentences, it shall be exchangeable for definitive Notes, bearing interest at the same
rate, having the same date of issuance, redemption provisions, Stated Maturity and other terms in
registered form and of differing denominations aggregating a like amount.

As provided in the Indenture and subject to the limitations herein and therein set forth, the
transfer of this Note is registrable in the Security Register, upon surrender of this Note for
registration of transfer at the office or agency of the Company in any place where the principal of
and any premium and interest on this Note are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the Security Registrar duly
executed by the Holder hereof or the Holder’s attorney duly authorized in writing, and thereupon
one or more new Notes of authorized denominations and for the same aggregate principal amount will
be issued to the designated transferee or transferees.

The Notes are issuable only in registered form without coupons in denominations of $2,000 and
integral multiples of $1,000 in excess thereof. No Notes will be issuable in denominations of less
than $2,000. As provided in the Indenture and subject to the limitations herein and therein set
forth, the Notes are exchangeable for a like aggregate principal amount of Notes and of like tenor
in denominations of $2,000 and integral multiples of $1,000 in excess thereof, as requested by the
Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the places, at the respective times and at the rate
herein prescribed.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of not less than a majority in aggregate principal amount
of the Securities at the time Outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate principal amount
of the Securities of each series at the time Outstanding, on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences. Any such consent
or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.

As provided in and subject to the provisions of the Indenture, the Holder of this Note shall
not have the right to institute any proceeding with respect to the Indenture or for the appointment
of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the Notes at the time Outstanding
shall have made written request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in principal amount of the Notes at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any such proceeding,
for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Note for the enforcement of any payment of
principal hereof or any premium or interest hereon on or after the respective due dates expressed
herein.

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may deem and treat the Person in whose name this Note
is registered as the absolute owner of this Note at such holder’s address as it appears on the
Security Register (whether or not this Note shall be overdue) for the purpose of receiving payment
of or on account hereof and for all other purposes, and neither the Company nor the Trustee nor any
such agent shall be affected by any notice to the contrary. All payments made to or upon the order
of such registered holder shall, to the extent of the sum or sums paid, effectually satisfy and
discharge liability for moneys payable on this Note.

No recourse under or upon any obligation, covenant or agreement contained in the Indenture or
in any indenture supplemental thereto or any Note, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, or against any past, present or future stockholder,
officer or director, as such, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such personal liability of every such incorporator, stockholder, officer and
director, as such, being expressly waived and released by acceptance hereof and as a condition of
and as part of the consideration for the issuance of this Note.

Capitalized terms used herein which are not defined herein shall have the respective meanings
assigned thereto in the Indenture.

The Indenture is, and this Note shall be, governed by and construed in accordance with the
laws of the State of New York.

3

___________________________

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations:

	 	 	 	 	 
	TEN COM	 	as tenants in common	 	 	UNIF TRAN MIN ACT ______CUSTODIAN______
	TEN ENT	 	as tenants by the entireties	 	 	(Cust) (Minor)
	JT TEN	 	as joint tenants with right	 	 	Under Uniform Transfers to Minors Act
	 	 	 	 	of survivorship and not as	 	 	 
	 	 	 	 	tenants in common	 	 	________________________________
	 	 	 	 	 	 	 	(State)

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

Please insert Social Security or

Other identifying Number of Assignee

      

/      /
     

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

     
     

     
     

the within Note of GENERAL MILLS, INC. and does hereby irrevocably constitute and appoint
     

     attorney to transfer said Note on the books of the
Company, with full power of substitution in the premises.

Dated:              

      

NOTICE: The signature to this assignment must correspond with the name as written upon the face of
the within instrument in every particular, without alteration or enlargement or any change
whatever.

4EX-10.1

 Exhibit 10.1 

SETTLEMENT AGREEMENT 

I. Parties 
 1. This
Settlement Agreement (“Agreement”) is entered into between the United States of America, acting through the United States Department of Justice (“Department of Justice”) and the United States Attorney’s Office for the
District of New Jersey (referred to collectively herein as the “United States”), along with the States of Arizona, California, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Mississippi,
Missouri, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, South Carolina, and Washington, and the District of Columbia, acting through their respective Attorney General or state securities regulator, as may be applicable, (each of
the States and the District of Columbia set forth above referred to individually as “State” and collectively as “the States”), and Moody’s Corporation, Moody’s Investors Service, Inc. and Moody’s Analytics, Inc.
(collectively “Moody’s”). The United States, the States, and Moody’s are collectively referred to herein as “the Parties.” 

II. Recitals 
 2.
The Department of Justice, Civil Division, Consumer Protection Branch and the United States Attorney’s Office for the District of New Jersey conducted an investigation into Moody’s credit ratings assigned to residential mortgage-backed
securities (“RMBS”) and collateralized debt obligations 

  
 -1- 

 
(“CDOs”) through May 27, 2010. Based on this investigation, the United States believes that there are potential legal claims by the United States against Moody’s for
violations of federal law under, among other statutes, the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), 12 U.S.C. § 1833a, in connection with this conduct. 

3. On the following dates, in the following courts, the following States, based on their independent investigations, filed the cases captioned
as follows (collectively, the “State Cases”): 
  

							
	 State
	  	 Filing Date
	  	 Court
	  	 Caption

				
	Connecticut	  	3/10/2010	  	 Connecticut Superior Court, Judicial District of Hartford at Hartford

 
	  	Connecticut v. Moody’s Corporation and Moody’s Investors Service, Inc., No.
HHD-cv-10-6008836-S
	Mississippi	  	5/10/2011	  	Chancery Court of the First Judicial District, Hinds County	  	 Mississippi ex rel. Hood v. Moody’s Corporation and Moody’s Investors Service, Inc.,
No. G 2011-835 S/2
  

	South Carolina	  	9/9/2016	  	South Carolina Court of Common Pleas, Richland	  	State of South Carolina, ex rel. Alan Wilson, in his official capacity as Attorney General for the State of South Carolina v. Moody’s Corporation, Moody’s Investors Service, Inc., and Moody’s Analytics, Inc.,
No. 2016-CP-40-5488

  
 -2- 

 4. The States, based on their independent investigations of the conduct identified above in
Paragraph 2, believe that there are potential legal claims against Moody’s for state law violations in connection with that conduct. 

5. This Agreement sets out the terms on which the Parties, to avoid the delay, uncertainty, inconvenience, and expense of litigation or
further litigation, have agreed to settle the potential claims of the United States and the States. To implement this Agreement and in consideration of the mutual promises and obligations set forth in this Agreement, the Parties agree and covenant
as follows: 
 III. Terms and Conditions 

6. Definitions. The following terms used in this Agreement shall have the following meanings: 

a. “RMBS” means residential mortgage-backed securities. 

b. “CDO” means a collateralized debt obligation of any type, including cash flow, synthetic, and hybrid collateralized debt
obligations, including collateralized loan obligations and collateralized bond obligations, and including any of these types of CDOs in which some or all of the underlying collateral was other CDOs or credit default swaps that referenced other CDOs.

 c. “CDO of RMBS” means a CDO for which any of the collateral was RMBS, another CDO of RMBS, or credit default swaps that
referenced either RMBS or any CDO of RMBS. 

  
 -3- 

 d. “CMBS” means commercial mortgage-backed securities. 

e. “SIV” means structured investment vehicles. 

f. “ABS” means asset-backed securities. 

g. “Structured Finance Instruments” means RMBS, ABS, CMBS, CDOs, including without limitation CDOs of RMBS, and SIVs. 

h. “Released Entities” means Moody’s, together with any current and former parent companies, direct and indirect
subsidiaries and divisions, business units, affiliates, and the successors and assigns of any of them. 
 i. “Covered Conduct”
means (1) all activities by the Released Entities in connection with the issuance, confirmation, and surveillance of ratings for Structured Finance Instruments, including modifications and adjustments to the procedures and methodologies
used to rate Structured Finance Instruments; and (2) all statements by the Released Entities concerning the integrity, objectivity, independence and lack of influence from business concerns of their activities in connection with the issuance,
confirmation, and surveillance of ratings for Structured Finance Instruments, including statements concerning their codes of conduct and/or business ethics and policies and procedures. 

j. “Effective Date of this Agreement” means the date of signature of the last signatory to this Agreement. 

  
 -4- 

 7. Statement of Facts. Moody’s acknowledges the facts set out in the Statement of
Facts set forth in Annex 1, which is attached hereto and incorporated by reference. 
 8. Payment. Moody’s shall pay a total
amount of $863,791,823.00 to resolve pending and potential legal claims as set forth herein (the “Settlement Amount”) as follows: 

a. Within thirty (30) calendar days of receiving written payment processing instructions from the Department of Justice, Moody’s
shall pay $437,500,000.00 of the Settlement Amount by electronic funds transfer to the Department of Justice. The entire amount of $437,500,000.00 is a civil monetary penalty recovered pursuant to FIRREA, 12 U.S.C. § 1833a. 

  
 -5- 

 b. Within the time limits specified below, Moody’s shall pay the States a total of
$426,291,823.00 in the allocated amounts set forth below as compensation to the States for harms to the States, purportedly caused by the allegedly unlawful conduct of Moody’s. The funds paid to the States may be used or expended in any way
permitted by applicable state law at each State’s sole discretion pursuant to the terms set forth below. No portion of this $426,291,823.00 is paid as a civil monetary penalty, fine, or payment in lieu thereof. 

i. $12,672,728.00, and no other amount, will be paid by Moody’s to the State of Arizona pursuant to this Agreement and the terms of
written payment instructions from the State of Arizona, Office of the Attorney General. Two million ($2,000,000) of that amount is for attorneys’ fees, and two million five hundred thousand ($2,500,000) is for restitution including the cost of
claims administration. The remainder of the payment, and any amounts remaining from restitution, shall, pursuant to state law, be used by the Arizona Attorney General for other costs of investigation or litigation, for remediation, or for other
consumer protection purposes, or for other uses as permitted by governing state law, within the discretion of the Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving written payment
processing instructions from the State of Arizona, Office of the Attorney General and shall be placed upon receipt in an interest bearing account. 

ii. $150,000,000.00, and no other amount, will be paid by Moody’s to the State of California pursuant to this Agreement and the terms of
written payment instructions from the State of California, Office of the Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving written payment processing instructions from the State
of California, Office of the Attorney General. 

  
 -6- 

 iii. $31,519,461.00, and no other amount, will be paid by Moody’s to the State of
Connecticut pursuant to this Agreement and the terms of written payment instructions from the State of Connecticut, Office of the Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving
written payment processing instructions from the State of Connecticut, Office of the Attorney General. 
 iv. $6,768,533.00, and no other
amount, will be paid by Moody’s to the State of Delaware pursuant to this Agreement and the terms of written payment instructions from the State of Delaware, Office of the Attorney General. Payment shall be made by electronic funds transfer
within thirty (30) calendar days of receiving written payment processing instructions from the State of Delaware, Office of the Attorney General. 

v. $6,450,211.00, and no other amount, will be paid by Moody’s to the District of Columbia pursuant to this Agreement and the terms of
written payment instructions from the District of Columbia, Office of the Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving written payment processing instructions from the
District of Columbia, Office of the Attorney General. 
 vi. $7,488,167.00, and no other amount, will be paid by Moody’s to the State
of Idaho pursuant to this Agreement and the terms of written 

  
 -7- 

 
payment instructions from the State of Idaho, Office of the Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving written payment
processing instructions from the State of Idaho, Office of the Attorney General. 
 vii. $19,591,960.00, and no other amount, will be paid
by Moody’s to the State of Illinois pursuant to this Agreement and the terms of written payment instructions from the State of Illinois, Office of the Attorney General. Payment shall be made by electronic funds transfer within thirty
(30) calendar days of receiving written payment processing instructions from the State of Illinois, Office of the Attorney General for ultimate deposit into one or more of the following funds in such amounts as determined by the Attorney
General: (a) designated state pension funds, (b) the Attorney General Court Ordered and Voluntary Compliance Payment Projects Fund (the 542 fund), and (c) the General Revenue Fund. 

viii. $12,771,364.00, and no other amount, will be paid by Moody’s to the State of Indiana pursuant to this Agreement and the terms of
written payment instructions from the State of Indiana, Office of the Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving written payment processing instructions from the State of
Indiana, Office of the Attorney General. Payment to the State of Indiana shall 

  
 -8- 

 
be used for expenses and other costs incurred while investigating or resolving this matter; or shall be placed in, or applied to, a consumer or investor protection enforcement fund, aid fund, or
revolving fund; or shall be used for past, current, or future consumer protection or investor protection enforcement, education, litigation, regulation, or administrative actions; or shall be used for other uses permitted by state law; at the sole
discretion of the Attorney General. 
 ix. $9,077,325.00, and no other amount, will be paid by Moody’s to the State of Iowa pursuant
to this Agreement and the terms of written payment instructions from the State of Iowa, Office of the Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving written payment processing
instructions from the State of Iowa, Office of the Attorney General. The payment shall be used at the sole and complete discretion of the Attorney General of Iowa, for any use permitted by law or this Agreement, including but not limited to:
(a) purposes intended to ameliorate the effects of the financial crisis; to enhance law enforcement efforts to prevent and prosecute financial fraud and unfair or deceptive acts or practices, including funding for training and staffing of
financial fraud or general consumer protection efforts; and to compensate the State of Iowa for costs resulting from the alleged unlawful conduct of Moody’s, including losses sustained by State employee pension plans or other State government
funds due to the financial 

  
 -9- 

 
crisis; (b) public education relating to consumer fraud and for funding for enforcement of Iowa Code section 714.16, including reimbursement of investigative and litigation costs incurred by
the Iowa Attorney General’s Office in connection with this lawsuit; and (c) any other lawful purpose. 
 x. $3,066,092.00, and no
other amount, will be paid by Moody’s to the State of Kansas pursuant to this Agreement and the terms of written payment instructions from the State of Kansas, Office of the Attorney General. Payment shall be made by electronic funds transfer
within thirty (30) calendar days of receiving written payment processing instructions from the State of Kansas, Office of the Attorney General. The Kansas Attorney General shall use these funds solely for enforcing and implementing the consumer
protection laws of the State of Kansas that are within the jurisdiction of the Kansas Attorney General. 
 xi. $7,231,089.00, and no other
amount, will be paid by Moody’s to the State of Maine pursuant to this Agreement and the terms of written payment instructions from the State of Maine, Office of the Attorney General. Payment shall be made by electronic funds transfer within
thirty (30) calendar days of receiving written payment processing instructions from the State of Maine, Office of the Attorney General. The payment to the State of Maine, Office of the Attorney General, shall be used in the sole discretion of
the Attorney General for reimbursement of costs and attorneys’ fees; restitution; consumer protection; health 

  
 -10- 

 
and education, including financial literacy and student loan issues; law enforcement; litigation support; and efforts to remediate the effects of the mortgage and financial crisis. Said funds are
to be used to supplement and not to supplant existing programs. 
 xii. $12,008,097.00, and no other amount, will be paid by Moody’s
to the State of Maryland pursuant to this Agreement and the terms of written payment instructions from the State of Maryland, Office of the Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of
receiving written payment processing instructions from the State of Maryland, Office of the Attorney General. Said payment shall be used in accordance with state law, in the sole discretion of the Maryland Attorney General, for consumer protection
enforcement, consumer education, or other consumer protection purposes, or may be used for any other public purpose. 
 xiii.
$12,839,956.00, and no other amount, will be paid by Moody’s to the State of Massachusetts pursuant to this Agreement and the terms of written payment instructions from the State of Massachusetts, Office of the Attorney General. Payment shall
be made by electronic funds transfer within thirty (30) calendar days of receiving written payment processing instructions from the State of Massachusetts, Office of the Attorney General and shall be used in the discretion of the Attorney
General as permitted by law. 

  
 -11- 

 xiv. $26,492,366.00, and no other amount, will be paid by Moody’s to the State of
Mississippi pursuant to this Agreement and the terms of written payment instructions from the State of Mississippi, Office of the Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving
written payment processing instructions from the State of Mississippi, Office of the Attorney General. Said payment shall be used by the Mississippi Attorney General for attorneys’ fees and other costs of investigation or litigation, placed in
or applied to the consumer protection fund, and for consumer protection purposes and other uses permitted by law. 
 xv. $12,239,549.00,
and no other amount, will be paid by Moody’s to the State of Missouri pursuant to this Agreement and the terms of written payment instructions from the State of Missouri, Office of the Attorney General, to be distributed thereafter in a manner
to be determined by the Missouri Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving written payment processing instructions from the State of Missouri, Office of the Attorney
General. 
 xvi. $7,218,311.00, and no other amount, will be paid by Moody’s to the State of New Hampshire pursuant to this Agreement
and the terms of written payment instructions from the State of New Hampshire, Bureau of Securities Regulation. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving written payment processing
instructions from the State of New Hampshire, Bureau of Securities Regulation. 

  
 -12- 

 xvii. $15,251,746.00, and no other amount, will be paid by Moody’s to the State of New
Jersey pursuant to this Agreement and the terms of written payment instructions from the State of New Jersey, Office of the Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving
written payment processing instructions from the State of New Jersey, Office of the Attorney General. 
 xviii. $16,050,841.00, and no
other amount, will be paid by Moody’s to the North Carolina Attorney General pursuant to this Agreement and the terms of written payment instructions from the North Carolina Attorney General. Payment shall be made within thirty
(30) calendar days of receiving written payment processing instructions from the North Carolina Attorney General. Said payment shall be used by the North Carolina Attorney General for attorneys’ fees and other costs of investigation or
litigation, placed in or applied to the consumer protection fund, and for consumer protection purposes and other uses permitted by law, at the discretion of the North Carolina Attorney General. 

xix. $9,920,620.00, and no other amount, will be paid by Moody’s to the State of Oregon pursuant to this Agreement and the terms of
written payment instructions from the State of Oregon, Office of the Attorney 

  
 -13- 

 
General. This payment shall be deposited to the Department of Justice Account established pursuant to ORS 180.095 to be used as provided by law. Payment shall be made by electronic funds transfer
within thirty (30) calendar days of receiving written payment processing instructions from the State of Oregon, Office of the Attorney General. 

xx. $19,454,134.00, and no other amount, will be paid by Moody’s to the Commonwealth of Pennsylvania, Office of Attorney General
pursuant to this Agreement and the terms of written payment instructions from the Commonwealth of Pennsylvania, Office of the Attorney General. Payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving
written payment processing instructions from the Commonwealth of Pennsylvania, Office of the Attorney General. 
 xxi. $10,774,201.00, and
no other amount, will be paid by Moody’s to the State of South Carolina pursuant to this Agreement and the terms of written payment instructions from the State of South Carolina, Office of the Attorney General. Payment shall be made by
electronic funds transfer within thirty (30) calendar days of receiving written payment processing instructions from the State of South Carolina, Office of the Attorney General. South Carolina may allocate such payment in the South Carolina
Attorney General’s sole discretion and in accordance with any and all obligations imposed by law for purposes including, 

  
 -14- 

 
but not limited to, a consumer protection enforcement fund, consumer education fund, consumer litigation fund, local consumer aid fund, or revolving fund; for attorneys’ fees and other costs
of investigation and litigation; for cy pres purposes; or for any other uses not prohibited by law. 
 xxii. $13,030,072.00, and no other
amount, will be paid by Moody’s to the State of Washington pursuant to this Agreement and the terms of written payment instructions from the State of Washington, Office of the Attorney General. Payment shall be made by electronic funds transfer
within thirty (30) calendar days of receiving written payment processing instructions from the State of Washington, Office of the Attorney General. The Attorney General shall use the funds for recovery of its costs and attorneys’ fees in
investigating this matter, future monitoring and enforcement of this Agreement, future enforcement of RCW 19.86, or for any lawful purpose in the discharge of the Attorney General’s duties at the sole discretion of the Attorney General. 

xxiii. $375,000.00, and no other amount, will be paid by Moody’s to the National Association of Attorneys General Financial Services and
Consumer Protection Enforcement, Education and Training Fund and $4,000,000.00, and no other amount, will be paid by Moody’s to the National Association of Attorneys General NAGTRI Endowment Fund pursuant to this Agreement and the terms of
written payment instructions from the National 

  
 -15- 

 
Association of Attorneys General. This compensation payment shall be made by electronic funds transfer within thirty (30) calendar days of receiving written payment processing instructions
from the President of the National Association of Attorneys General. No portion of this $4,375,000.00 is paid as a civil monetary penalty, fine, or payment in lieu thereof. 

c. The payment instructions described in Paragraphs 8(a) and 8(b) may be issued only after the Effective Date of this Agreement. 

9. Compliance Commitments. 

Moody’s has agreed to maintain certain existing compliance measures, and to adopt certain additional compliance measures, that promote
the integrity and independence of Moody’s credit ratings, which compliance measures are set forth in Annex 2 to this Agreement (“Compliance Commitments”). Moody’s has agreed to maintain these measures for a period of 5 years.

 10. Resolution of Pending Cases. As soon as practicable, but in no event later than fourteen (14) calendar days after the
Effective Date of this Agreement, Moody’s and each of the States of Connecticut, Mississippi, and South Carolina shall sign and file in each respective State Case stipulations of dismissal or similar pleadings, or stipulated judgments, as
provided by the rules of practice in each of the States to bring formal legal proceedings to a close. Any stipulated judgement shall not include or incorporate the annexes to this Agreement. 

  
 -16- 

 11. Effect of State Law. This Agreement shall be considered an Assurance of Voluntary
Compliance, Assurance of Discontinuance, Cease and Desist By Agreement, or administrative order, as applicable, under: A.R.S. § 44-1530 (for Arizona), 29 Del C. § 2525 (for Delaware), D.C. Code
§§ 28-3901, et seq. (for the District of Columbia), Idaho Code § 48-610 (for Idaho), 815 ILCS 505/6.1 (for Illinois), Ind. Code § 24-5-0.5-7 (for Indiana), 5 M.R.S. section 210 (for Maine), Md. Code, Com. Law §
13-101, et seq. (for Maryland), M.G.L. c. 93A, sec. 5 (for Massachusetts), 73 P.S. § 201-5 (Pennsylvania), and Revised Code of Washington (RCW)
19.86.100 (for Washington). A State that is party to this Agreement may file this Agreement in its state court or administrative tribunal as may be required by the laws of such State. Failure to reference in this provision the law of any State
signing this Agreement shall have no effect on the enforceability of this Agreement under the law of any such State. 
 12. Releases by
the United States. Subject to the exceptions in Paragraph 14 of this Agreement (“Excluded Claims”), and conditioned upon Moody’s full and timely payment of the Settlement Amount, the United States fully and finally releases the
Released Entities from any civil claims arising out of the Covered Conduct through May 27, 2010 under FIRREA, 12 U.S.C. § 1833a; the False Claims Act, 31 U.S.C. §§ 3729, et seq.; the common law theories of negligence,
gross negligence, payment by mistake, unjust enrichment, breach of 

  
 -17- 

 
fiduciary duty, breach of contract, misrepresentation, deceit, fraud, or aiding and abetting any of the foregoing; or any other claim that the Civil Division of the Department of Justice has
actual and present authority to assert and compromise pursuant to 28 C.F.R. § 0.45(d) and (j). 
 13. Releases by the States.
Subject solely to the exceptions set forth in Paragraph 14 of this Agreement (“Excluded Claims”), the conditions set forth in this paragraph, and any particular conditions or exceptions set forth in the subparagraphs below defining each
State’s release, each of the States fully and finally releases the Released Entities in accordance with the terms set forth in the subparagraph below defining that State’s release. Each State’s release of claims below is expressly
conditioned on Moody’s full and timely payment of the Settlement Amount, including without limitation payment to each of the States as specified in Paragraph 8 of this Agreement, and in the case of the States of Connecticut, Mississippi, and
South Carolina, on the entry of stipulations of dismissal or stipulated judgments as provided in Paragraph 10 of this Agreement and by the rules of practice in each of the States to bring formal legal proceedings to a close. 

a. Releases by the State of Arizona. The Office of the Arizona Attorney General fully and finally releases the Released Entities from
any civil claim the Attorney General could assert under the Arizona Consumer Fraud Act, 

  
 -18- 

 
Ariz. Rev. Stat. sections 44-1521, et seq., arising out of (a) the factual allegations in the complaints filed in the State Cases; (b) the
Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under the Civil Investigative Demand issued in
PHX-INV-2015-0365, dated June 15, 2015. The Arizona Attorney General executes this release in his official capacity and releases only the claims, referenced above,
that the Arizona Attorney General has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned Civil Investigative Demand shall be deemed terminated. 

b. Releases by the State of California. The Office of the California Attorney General fully and finally releases the Released Entities
from any civil claim the Attorney General could assert under California Business and Professions Code Sections 17200 et seq., the Unfair Competition Law, Sections 17500 et seq., the False Advertising Law, and California Government Code
12650 et seq., the California False Claims Act, arising out of (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and
(c) the matters investigated under Subpoenas dated September 17, 2009, May 22, 2014, February 5, 2015, March 5, 2015 and March 25, 2016. The California Attorney General executes this release in her official capacity and
releases only claims that the California Attorney 

  
 -19- 

 
General has the authority to bring and release. The California Attorney General and Moody’s acknowledge that they have been advised by their attorneys of the contents and effect of
Section 1542 of the California Civil Code (“Section 1542”) and hereby expressly waive with respect to this Agreement any and all provisions, rights, and benefits conferred by Section 1542 which states: “A general
release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”
Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned subpoenas shall be deemed terminated. 
 c.
Releases by the State of Connecticut. The State of Connecticut, acting through the Office of the Connecticut Attorney General, fully and finally releases the Released Entities from any civil claim the Connecticut Attorney General could assert
under the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a et seq., arising out of (a) the factual allegations in the complaints filed in the State Cases; (b) the
Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under the subpoenas dated October 10, 2007, December 6, 2007, and January 14, 2008 and issued by the Connecticut
Attorney General. The Connecticut Attorney General executes this release in his official capacity and releases only claims, referenced 

  
 -20- 

 
above, that the Connecticut Attorney General has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned subpoenas
shall be deemed terminated. 
 d. Releases by the State of Delaware. The Delaware Department of Justice fully and finally releases
the Released Entities from any civil claim the Attorney General for the State of Delaware could assert under the Delaware Consumer Fraud Act, 6 Del. C. § 2513 et seq., and the Delaware Deceptive Trade Practices Act, 6 Del. C.
§ 2532 et seq., arising out of (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters
investigated under the subpoena issued by the Delaware Department of Justice dated June 3, 2013. The Delaware Attorney General executes this release in his official capacity and releases only claims, referenced above, that the Delaware Attorney
General has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned subpoena shall be deemed terminated. 

e. Releases by the District of Columbia. The District of Columbia, acting through the Office of the Attorney General for the District
of Columbia and the Commissioner of the District of Columbia Department of Insurance, Securities and Banking, fully and finally releases the Released Entities 

  
 -21- 

 
from any civil claim the Attorney General could assert under the Consumer Protection Procedures Act, D.C. Code § 28-3901, et seq., or any claim
the Commissioner of the District of Columbia Department of Insurance, Securities and Banking could assert under the Securities Act of 2000, D.C. Code § 31-5601.01, et. seq., arising out of
(a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under the subpoenas issued by the
Office of Attorney General dated June 8, 2015 and November 2, 2015. The Attorney General for the District of Columbia and the Commissioner of the District of Columbia Department of Insurance, Securities and Banking execute this release in
their official capacity and release only claims, referenced above, that the Attorney General for the District of Columbia or the Commissioner of the District of Columbia Department of Insurance, Securities and Banking has the authority to bring and
release. Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned subpoenas shall be deemed terminated. 

f. Releases by the State of Idaho. The Office of the Idaho Attorney General fully and finally releases the Released Entities from any
civil claim the Attorney General could assert under the Idaho Consumer Protection Act, Idaho Code Sections 48-601 et seq., arising out of (a) the factual allegations in the complaints filed in
the State Cases; (b) the Covered Conduct for the period January 1, 

  
 -22- 

 
2001 through December 31, 2014; and (c) the matters investigated under the Idaho Attorney General’s Civil Investigative Demand (CID), dated July 14, 2015. The Idaho Attorney
General executes this release in his official capacity and releases only claims, referenced above, that the Idaho Attorney General has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed by
the aforementioned CID shall be deemed terminated. 
 g. Releases by the State of Illinois. The Office of the Illinois Attorney
General fully and finally releases the Released Entities from any civil claim the Attorney General could assert under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq., arising out of (a) the
factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under Subpoena
No. 2015-71, dated May 18, 2015; Subpoena No. 2016-2, dated January 16, 2016; and Subpoena No. 2016-31,
dated May 3, 2016. The Illinois Attorney General executes this release in her official capacity and release only claims, referenced above, that the Illinois Attorney General has the authority to bring and release. Upon execution of this
Settlement Agreement, the investigation encompassed by the aforementioned subpoenas shall be deemed terminated. 

  
 -23- 

 h. Releases by the State of Indiana. The Office of the Indiana Attorney General and the
Indiana Securities Commissioner, respectively, fully and finally releases the Released Entities from any civil claim the Attorney General could assert under the Indiana Deceptive Consumer Sales Act, Ind. Code § 24-5-0.5-3 or any regulatory claim the Indiana Securities Commissioner could assert under the Indiana Securities Act, Ind. Code § 23-19-1, arising out of (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and
(c) the matters investigated under Civil Investigative Demand (CID) No. 15-041, dated September 24, 2015 and CID No. 15-044, dated October 15,
2015. The Indiana Attorney General and the Indiana Securities Commissioner execute this release in their respective official capacities and release only claims, referenced above, that the Indiana Attorney General or Indiana Securities Commissioner
has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned CIDs shall be deemed terminated. 

i. Releases by the State of Iowa. The Office of the Iowa Attorney General fully and finally releases the Released Entities from any
civil claim the Attorney General could assert under the Iowa Consumer Fraud Act, Iowa Code Section 714.16, arising out of (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period
January 1, 2001 

  
 -24- 

 
through December 31, 2014; and (c) the matters investigated under Subpoena No. 2480, dated October 9, 2015 and Subpoena No. 2546, dated August 15, 2016. The Iowa
Attorney General executes this release in his official capacity and releases only claims, referenced above, that the Iowa Attorney General has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation
encompassed by the aforementioned subpoenas shall be deemed terminated. 
 j. Releases by the State of Kansas. The Office of the
Kansas Attorney General fully and finally releases the Released Entities from any civil claim the Attorney General could assert under the Kansas Consumer Protection Act, K.S.A. 50-623, et seq. arising
out of (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under a Subpoena Duces Tecum
issued under file number CP-16-000885, dated August 15, 2016. The Kansas Attorney General executes this release in his official capacity and releases only claims,
referenced above, that the Kansas Attorney General has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned subpoena shall be deemed terminated. 

k. Releases by the State of Maine. The State of Maine, acting through the Office of the Maine Attorney General, fully and finally
releases the 

  
 -25- 

 
Released Entities from any civil claim arising out of (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period January 1, 2001
through December 31, 2014; and (c) the matters investigated under a CID dated August 24, 2015. The Maine Attorney General executes this release in her official capacity and releases only claims that the Maine Attorney General has the
authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned CID(s) shall be deemed terminated. 

l. Releases by the State of Maryland. The Office of the Maryland Attorney General and the Maryland Securities Commissioner,
respectively, fully and finally release the Released Entities from any civil claim the Attorney General could assert under the Maryland Consumer Protection Act, Md. Code, Com. Law sections 13-101, et
seq., or any regulatory claim the Maryland Securities Commissioner could assert under the Maryland Securities Act, Md. Code, Corps. & Ass’ns, Title 11, arising out of (a) the factual allegations in the complaints filed in the State
Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under Subpoena No. 2015-0506, dated December 10, 2015. The Maryland Attorney General and the
Maryland Securities Commissioner execute this release in their respective official capacities and release only claims, referenced above, that the 

  
 -26- 

 
Maryland Attorney General or Maryland Securities Commissioner has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed by the
aforementioned subpoenas shall be deemed terminated. 
 m. Releases by the Commonwealth of Massachusetts. The Office of the
Massachusetts Attorney General fully and finally releases the Released Entities from any civil claim the Attorney General could assert under the Massachusetts Consumer Protection Act, M.G.L. c. 93A and the Massachusetts False Claims Act, M.G.L. c.
12, sec. 5. arising out of (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under CID
No. 07-IFS-063, dated November 8, 2007; CID No. 15-IFS-004, dated March 31,
2015; CID No. 15-IFS-038, dated November 13, 2015; and CID No. 16-IFS-045, dated
June 6, 2016. The Massachusetts Attorney General executes this release in her official capacity and releases only claims, referenced above, that the Massachusetts Attorney General has the authority to bring and release. Upon execution of this
Settlement Agreement, the investigation encompassed by the aforementioned subpoenas shall be deemed terminated. 
 n. Releases by the
State of Mississippi. The Mississippi Attorney General fully and finally releases the Released Entities from any civil 

  
 -27- 

 
claim the Attorney General could assert under the Mississippi Consumer Protection Act, Miss. Code Ann. §
75-24-1 et seq., arising out of (a) the factual allegations in the complaints filed in the State Cases; and (b) the Covered Conduct for the period of
January 1, 2001 through December 31, 2014. The Mississippi Attorney General executes this release in his official capacity and releases only claims that the Mississippi Attorney General has the authority to bring and release. 

o. Releases by the State of Missouri. The State of Missouri, acting through the Office of the Missouri Attorney General and the
Missouri Commissioner of Securities, respectively, fully and finally release the Released Entities from any civil claim the Attorney General could assert under Section 407.020, RSMo, or any claim the Missouri Commissioner of Securities could
assert under Sections 409.5-501, and 409.5-502, RSMo, arising out of (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered
Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under CID No. JC-20-15, dated June 26, 2015 and
CID No. JC-24-16, dated February 18, 2016. The Missouri Attorney General and the Missouri Commissioner of Securities execute this release in their respective
official capacities and release only claims, referenced above, that the Missouri Attorney General or Missouri Securities Commissioner has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed
by the aforementioned Civil Investigative Demands shall be deemed terminated. 

  
 -28- 

 p. Releases by the State of New Hampshire. The New Hampshire Bureau of Securities
Regulation fully and finally releases the Released Entities from any civil claim the New Hampshire Bureau of Securities could assert under the New Hampshire Securities Act, N.H. R.S.A. § 421-B, arising
out of (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period of January 1, 2001 through December 31, 2014; and (c) the matters investigated under the Subpoenas No. I-2016-0003, both dated February 4, 2016. The Director of New Hampshire Bureau of Securities Regulation executes this release in his official capacity and releases only claims that the New Hampshire Bureau of
Securities Regulation has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned subpoenas shall be deemed terminated. 

q. Releases by the State of New Jersey, Office of the Attorney General. The Office of the New Jersey Attorney General and the New
Jersey Division of Consumer Affairs, respectively, fully and finally release the Released Entities from any civil claim the Attorney General could assert under the New Jersey Consumer Fraud Act, N.J.S.A.
56:8-1, et seq., arising out of: (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for 

  
 -29- 

 
the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under the Subpoena dated September 29, 2015. The New Jersey Attorney General and the
Director of the New Jersey Division of Consumer Affairs execute this release in their respective official capacities and release only claims, referenced above, that the New Jersey Attorney General or Director of the New Jersey Division of Consumer
Affairs has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned subpoena shall be deemed terminated. 

r. Releases by the State of North Carolina. The Office of the North Carolina Attorney General fully and finally releases the Released
Entities from any civil claim the North Carolina Attorney General could assert under the North Carolina Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. §§ 75-1.1, et seq., arising
out of (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under the civil investigative
demands dated July 10, 2015 and April 4, 2016. The North Carolina Attorney General executes this release in his official capacity and releases only claims, referenced above, that the North Carolina Attorney General has the authority to
bring and release. Upon execution of this Agreement, the investigation encompassed by the aforementioned civil investigative demands shall be deemed terminated. 

  
 -30- 

 s. Release by the State of Oregon. The Oregon Department of Justice, Office of the
Attorney General fully and finally releases the Released Entities from any civil claim the Attorney General could assert under the Oregon Unlawful Trade Practices Act, ORS 646.605, et seq., arising out of (a) the factual allegations in
the complaints filed in the State Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under the Civil Investigative Demand the Oregon Department of Justice
issued to Moody’s, dated September 18, 2015. The Oregon Attorney General executes this release in her official capacity and releases only claims, referenced above, that the Oregon Attorney General has the authority to bring and release.
Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned Investigative Demand shall be deemed terminated. 

t. Releases by the Commonwealth of Pennsylvania, Office of Attorney General. The Office of the Pennsylvania Attorney General fully and
finally releases the Released Entities from any civil claim the Attorney General could assert under the Unfair Trade Practices and Consumer Protection Law, 73 P.S. §§201-1, et seq. arising out
of: (a) the factual allegations in the complaints 

  
 -31- 

 
filed in the State Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under the subpoena dated
August 19, 2015. The Pennsylvania Attorney General executes this release in his official capacity and releases only claims, referenced above, that the Pennsylvania Attorney General has the authority to bring and release. Upon execution of this
Settlement Agreement, the investigation encompassed by the aforementioned subpoena shall be deemed terminated. 
 u. Releases by the
State of South Carolina. The Office of the South Carolina Attorney General fully and finally releases the Released Entities from any civil claim the Attorney General could assert under the South Carolina Unfair Trade Practices Act, S.C. Code
§ 39-5-10, et seq., or the South Carolina Uniform Securities Act of 2005, S.C. Code
35-1-101, et seq., arising out of (a) the factual allegations in the complaints filed in the State Cases; (b) the Covered Conduct for the period
January 1, 2001 through December 31, 2014; and (c) the matters investigated under the South Carolina Civil Investigative Demand dated September 29, 2015. The South Carolina Attorney General executes this release in his official
capacity and releases only claims, referenced above, that the South Carolina Attorney General has the authority to bring and release. Upon execution of this Settlement Agreement, the investigation encompassed by the aforementioned Civil
Investigative Demand shall be deemed terminated. 

  
 -32- 

 v. Releases by the State of Washington. The Office of the Washington Attorney General
fully and finally releases the Released Entities from any civil claim the Attorney General could assert under the Washington Consumer Protection Act, RCW 19.86 arising out of (a) the factual allegations in the complaints filed in the State
Cases; (b) the Covered Conduct for the period January 1, 2001 through December 31, 2014; and (c) the matters investigated under CIDs dated March 13, 2015; January 27, 2016; February 22, 2016; and April 1,
2016. The Washington Attorney General executes this release in his official capacity and releases only claims, referenced above, that the Washington Attorney General has the authority to bring and release. Upon execution of this Settlement
Agreement, the investigation encompassed by the aforementioned subpoenas shall be deemed terminated. 
 14. Excluded Claims.
Notwithstanding the releases in Paragraphs 12 and 13 of this Agreement, or any other term(s) of this Agreement, the following claims are specifically reserved and not released by this Agreement: 

a. Any criminal liability; 
 b.
Any antitrust liability, except, with respect to the States, to the extent any of the States have alleged or investigated practices by Moody’s that purportedly violate State antitrust laws; 

c. Any liability of any individual; 

  
 -33- 

 d. Any private right of action; 

e. Any liability of any person or entity other than the Released Entities; 

f. Any liability arising under Title 26 of the United States Code (the Internal Revenue Code) or the States’ similar tax codes or laws;

 g. Except as explicitly stated in this Agreement, any administrative liability, including the suspension and debarment rights of any
federal or state agency; 
 h. Any liability to or claims of the United States (or its agencies) or the States (or their agencies) for any
conduct other than that falling within the scope of the respective releases granted by the United States and the States in Paragraphs 12 and 13 of this Agreement; 

i. Any liability to or claims of the United States (or its agencies or any other party) as to which the United States Attorney General lacks
the authority to bring or compromise; 
 j. Any liability to or claims of the States (or their agencies or any other party) as to which the
respective Attorneys General of the States, or for Indiana the Securities Commissioner for Indiana, and for New Hampshire the New Hampshire Secretary of State, lack the authority to bring or compromise; 

  
 -34- 

 k. Any liability to or claims of county, municipal, or local pension funds or other county,
municipal, or local government funds as investors, unless otherwise explicitly released by an individual State in this Agreement; 
 l. Any
liability to or claims of county or local governments or state regulatory agencies having specific regulatory jurisdiction that is separate and independent from the regulatory and enforcement jurisdiction of the Attorneys General of the States, or
for Indiana the Securities Commissioner for Indiana, and for New Jersey the Director of the New Jersey Division of Consumer Affairs; 
 m.
Any liability based upon obligations created by this Agreement; 
 n. Any liability for the claims or conduct alleged in United States ex
rel. Kolchinsky v. Moody’s Corp., Civ. No. 12-cv-01399-WHP (SDNY), and no setoff for any amounts paid under this Agreement
shall be applied in connection with any recovery in that action; 
 o. Any liability for the claims or conduct alleged in Federal Home Loan
Bank of Boston v. Ally Financial, Inc. F/K/A GMAC LLC et al., Civ No. 1:11-cv-10952 (D. Mass.); and 

p. Any claims against financial institutions that securitized residential mortgage loans. 

15. Releases by Moody’s. The Released Entities fully and finally release the United States and the States, and their officers,
agents, employees, and 

  
 -35- 

 
servants, from any claims (including attorneys’ fees, costs, and expenses of every kind and however denominated) that the Released Entities have asserted, could have asserted, or may assert
in the future against the United States and the States, and their agencies, divisions, entities, officers, agents, employees, and servants, related to the conduct falling within the scope of the releases granted by the United States and the States
in Paragraphs 12 and 13 of this Agreement and the investigation and prosecution thereof by the United States and the States. 
 16.
Waiver of Potential Defenses by Moody’s. The Released Entities waive and shall not assert any defenses the Released Entities may have to any criminal prosecution or administrative action relating to the conduct falling within the scope
of the releases granted by the United States and the States in Paragraphs 12 and 13 of this Agreement that may be based in whole or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the Constitution, or under
the Excessive Fines Clause in the Eighth Amendment of the Constitution and the States’ similar state constitutional provisions, this Agreement bars a remedy sought in such criminal prosecution or administrative action. 

17. Unallowable Costs. Unallowable Costs (as defined in this paragraph) will be separately determined and accounted for by
Moody’s, and Moody’s shall not charge such Unallowable Costs directly or indirectly to any contract with the United States or the States. For purposes of this paragraph, “Unallowable Costs”

  
 -36- 

 
means unallowable costs for government contracting purposes, which shall specifically include all costs (as defined in the Federal Acquisition Regulation, 48 C.F.R. § 31.205-47) incurred by or on behalf of Moody’s, and its present or former officers, directors, employees, shareholders, and agents in connection with any of the following: 

a. the matters covered by this Agreement; 

b. the United States’ and the States’ civil investigation(s) of the matters covered by this Agreement; 

c. Moody’s investigation, defense, and Compliance Commitments undertaken in response to the United States’ and the States’
civil investigation(s) in connection with the matters covered by this Agreement (including attorneys’ fees); 
 d. the negotiation and
performance of this Agreement; and 
 e. the payments Moody’s makes to the United States and the States pursuant to this Agreement.

 18. Miscellaneous Provisions.  

a. This Agreement is intended to be for the benefit of the Parties only and does not create any third-party rights. 

b. The Parties acknowledge that this Agreement is made without any trial or final adjudication on the merits, and is not itself a final order
of any court or governmental authority. 

  
 -37- 

 c. Each Party shall bear its own legal and other costs incurred in connection with this matter,
including costs incurred in connection with the State Cases and the investigations conducted by the United States and the States leading to this Agreement, and the preparation and performance of this Agreement. 

d. Each Party and signatory to this Agreement represents that it freely and voluntarily enters into this Agreement without any degree of
duress or compulsion. 
 e. Nothing in this Agreement, or the Annexes attached hereto, in any way alters or affects the terms of any
applicable legal regulations with respect to registered credit rating agencies or Moody’s obligations under any such regulations. 
 f.
Nothing in this Agreement constitutes an agreement by the United States or the States concerning the characterization of the Settlement Amount for the purposes of the Internal Revenue laws, Title 26 of the United States Code, or similar state tax
codes or laws. 
 g. For the purposes of construing the Agreement, this Agreement shall be deemed to have been drafted by all Parties and
shall not, therefore, be construed against any Party for that reason in any dispute. 

  
 -38- 

 h. This Agreement constitutes the complete agreement between the Parties. This Agreement may not
be amended except by written consent of all the Parties. 
 i. The undersigned counsel for the United States and the States represent and
warrant that they are fully authorized to execute this Agreement on behalf of the United States and the States. 
 j. Counsel for
Moody’s shall provide a corporate resolution authorizing the execution of this Agreement on behalf of Moody’s, and represent and warrant that they are fully authorized to execute this Agreement on behalf of Moody’s. 

k. This Agreement may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same
Agreement. 
 l. This Agreement is binding on Moody’s successors, transferees, heirs, and assigns. 

m. All Parties consent to the disclosure to the public of this Agreement by Moody’s, the United States, and the States. 

n. This Agreement shall not be deemed to constitute approval of any of Moody’s credit rating models, methodologies, or practices, or the
advertising or promotion thereof, and neither Moody’s nor anyone acting on their behalf shall state or imply that this Agreement constitutes approval, sanction, or authorization for any act or practice of Moody’s. 

  
 -39- 

 o. This Agreement is effective on the date of signature of the last signatory to the Agreement.
Facsimiles of signatures and signatures provided by portable document format (“.pdf”) shall constitute acceptable, binding signatures for purposes of this Agreement. 

  
 -40- 

	
	For Moody’s Corporation,
	 Moody’s Investors Service, Inc.,
 and
Moody’s Analytics, Inc.:

	
	 /s/ John J. Goggins

	John J. Goggins
	Moody’s Corporation
	7 World Trade Center
	250 Greenwich Street
	New York, NY 10007

  

			
	Dated:	 	 1/13/17

 

	
	 /s/ Sharon L. Nelles

	Sharon L. Nelles
	Stephen Ehrenberg
	Sullivan & Cromwell LLP
	125 Broad Street
	New York, NY 10004
	Counsel for Moody’s Corporation,
	Moody’s Investors Service, Inc. and
	Moody’s Analytics, Inc.

  

			
	Dated:	 	 January 13, 2017

  
 -41- 

	
	For the United States:
	
	 /s/ SONDRA L. MILLS

	 SONDRA L. MILLS
 Senior Litigation Counsel

United States Department of Justice
 Civil Division, Consumer
Protection Branch
 P.O. Box 261, Ben Franklin Station

Washington, DC 20044

  

			
	Dated:	 	
1-13-17

  

	
	 /s/ THOMAS G. STRONG

	 THOMAS G. STRONG
 Assistant United States
Attorney
 United States Attorney’s Office
 District of New
Jersey
 970 Broad Street, 7th Floor
 Newark, NJ
07102

  

			
	Dated:	 	 1/13/2017

  
 -42- 

	
	For the State of Arizona:
	
	MARK BRNOVICH
	ATTORNEY GENERAL FOR THE STATE OF ARIZONA
	
	 /s/ Nancy M. Bonnell

	Nancy M. Bonnell
	 Dana R. Vogel
 Assistant Attorneys General

Consumer Protection & Advocacy Section
 Arizona Attorney
General’s Office
 1275 West Washington Street
 Phoenix,
Arizona 85007

  

			
	Dated:	 	 1/13/17

  
 -43- 

	
	For the State of California:
	
	KATHLEEN A. KENEALY
	Acting California Attorney General
	
	 /s/ EMILY C. KALANITHI

	EMILY C. KALANITHI
	Deputy Attorney General
	
	 California Department of Justice
 455 Golden
Gate, Suite 11000
 San Francisco, CA 94102

 

			
	Dated:	 	 January 13, 2017

  
 -44- 

	
	For the State of Connecticut:
	
	 /s/ GEORGE JEPSEN

	GEORGE JEPSEN
	 Attorney General for the State of Connecticut

55 Elm Street
 Hartford, CT
06141

  

			
	Dated:	 	 1/13/17

  
 -45- 

	
	For the State of Delaware:
	
	MATTHEW P. DENN
	Attorney General for the State of Delaware
	
	By:
	
	 /s/ Jillian A. Lazar

	Jillian A. Lazar
	 Deputy Attorney General
 Investor Protection
Unit
 820 N. French Street
 Wilmington, DE
19801

  

			
	Dated:	 	 1.13.2017

  
 -46- 

	
	For the District of Columbia:
	
	 /s/ KARL A. RACINE

	KARL A. RACINE
	 Attorney General for the District of Columbia

441 Fourth Street, NW
 Washington, D.C.
20001

  

			
	Dated:	 	 January 13, 2017

 

	
	 /s/ STEPHEN C. TAYLOR

	STEPHEN C. TAYLOR
	 Commissioner of the District of Columbia

Department of Insurance, Securities and Banking
 810 First Street,
NE, Suite 701
 Washington, DC 20002

 

			
	Dated:	 	 January 13, 2017

  
 -47- 

	
	For the State of Idaho:
	
	LAWRENCE G. WASDEN
	ATTORNEY GENERAL FOR THE STATE OF IDAHO
	
	By:
	
	 /s/ Brett T. DeLange

	Brett T. DeLange
	Consumer Protection Division Chief
	
	Jane E. Hochberg
	
	 Deputy Attorneys General
 Consumer Protection
Division
 954 West Jefferson, 2nd Floor
 Boise, ID
83720

  

			
	Dated:	 	 1/13/17

  
 -48- 

	
	For the State of Illinois:
	
	 /s/ DEBORAH HAGAN

	DEBORAH HAGAN
	Consumer Protection Division, Chief
	SUSAN ELLIS
	Chicago Consumer Fraud Bureau, Chief
	100 West Randolph Street, 12th Floor
	Chicago, IL 60601

  

			
	Dated:	 	 1/13/17

  
 -49- 

	
	For the State of Indiana:
	
	 /s/ CURTIS T. HILL, JR.

	CURTIS T. HILL, JR.
	Attorney General for the State of Indiana
	Indiana Attorney General’s Office
	Indiana Government Center South
	302 West Washington Street, 5th Floor
	Indianapolis, IN 46204

  

			
	Dated:	 	 01/13/2017

 

	
	 /s/ ALEX GLASS

	ALEX GLASS
	Securities Commissioner for Indiana
	Secretary of State Connie Lawson
	302 West Washington Street, Room El11
	Indianapolis, IN 46204

  

			
	Dated:	 	 1/13/2017

  
 -50- 

	
	For the State of Iowa:
	
	 /s/ THOMAS J. MILLER

	THOMAS J. MILLER
	Attorney General for the State of Iowa
	Iowa Department of Justice
	Hoover Building, 2nd Floor
	Des Moines, Iowa 50319

  

			
	Dated:	 	 1/13/17

  
 -51- 

			
	For the State of Kansas:
	
	 /s/ DEREK SCHMIDT

	DEREK SCHMIDT	 	by Jeffrey A. Chanay,
	Attorney General of Kansas	 	Chief Deputy
	120 SW 10th Ave., 2nd Floor
	Topeka, KS 66612

  

			
	Dated:	 	 January 13, 2017

  
 -52- 

	
	For the State of Maine
	
	 /s/ LINDA CONTI

	LINDA CONTI
	Consumer Protection Division Chief
	Office of the Attorney General
	6 State House Station
	Augusta, Maine 04333

  

			
	Dated:	 	 January 13, 2017

  
 -53- 

	
	For the State of Maryland:
	
	BRIAN E. FROSH
	Attorney General of Maryland
	
	By:
	
	 /s/ WILLIAM D. GRUHN

	WILLIAM D. GRUHN
	Chief
	Office of the Attorney General of Maryland,
	Consumer Protection Division
	200 St. Paul Place
	Baltimore, Maryland 21202

  

			
	Dated:	 	 1/13/17

 

	
	 /s/ MAX F. BRAUER

	MAX F. BRAUER
	Assistant Attorney General
	Office of the Attorney General of Maryland,
	Mortgage Unit
	200 St. Paul Place
	Baltimore, Maryland 21202

  

			
	Dated:	 	 1/13/2017

  
 -54- 

	
	 /s/ MELANIE SENTER LUBIN

	MELANIE SENTER LUBIN
	Securities Commissioner
	Office of the Attorney General of Maryland,
	Securities Division
	200 St. Paul Place
	Baltimore, Maryland 21202

  

			
	Dated:	 	 1/13/17

  
 -55- 

	
	For the Commonwealth of Massachusetts:
	
	 /s/ GLENN KAPLAN

	GLENN KAPLAN
	Insurance and Financial Services Division, Chief
	Office of the Attorney General of Massachusetts
	One Ashburton Place, 18th Floor
	Boston, MA 02108

  

			
	Dated:	 	 1/13/17

  
 -56- 

	
	For the State of Mississippi:
	
	 /s/ JIM HOOD

	JIM HOOD
	Attorney General for the State of Mississippi
	Office of the Mississippi Attorney General
	P.O. Box 220
	Jackson, Mississippi 39205

			
	Dated:	 	 13 January 2017

  
 -57- 

	
	For the State of Missouri:
	
	 /s/ Joshua D. Hawley

	Joshua D. Hawley
	Missouri Attorney General
	Supreme Court Building
	207 West High Street
	Jefferson, MO 65101

  

			
	Dated:	 	 1/13/2017

 

	
	 /s/ David M. Minnick

	David M. Minnick
	Commissioner of Securities
	600 West Main Street
	Jefferson City, Missouri 65101
	Telephone: (573) 751-4136
	Facsimile: (573) 526-3124

  

			
	Dated:	 	 1/13/17

  
 -58- 

	
	For the State of New Hampshire:
	
	 /s/ BARRY J. GLENNON

	
	BARRY J. GLENNON, DIRECTOR
	NH Bureau of Securities Regulation
	State House Room 204
	Concord, NH 03301

  

			
	Dated:	 	 1-13-17

  
 -59- 

			
	For the State of New Jersey:
	
	CHRISTOPHER S. PORRINO
	ATTORNEY GENERAL OF THE STATE OF NEW JERSEY
		
	By:	 	 /s/ Brian F. McDonough

		 	Brian F. McDonough
		 	Assistant Attorney General
		
		 	John M. Falzone
		 	Assistant Attorney General
		 	Lorraine K. Rak
		 	Chief, Deputy Attorney General
		 	Joshua I. Sherman
		 	Assistant Chief, Deputy Attorney General
		 	Mark E. Critchley
		 	Erin M. Greene
		 	Jesse J. Sierant
		 	Deputy Attorneys General
		
		 	Division of Law
		 	124 Halsey Street, 5th Floor
		 	P.O. Box 45029-5029
		 	Newark, New Jersey 07101
		 	(973) 648-4742

			
		
	Dated:	 	 January 13, 2017

  
 -60- 

	
	For the State of North Carolina:
	
	JOSH STEIN
	NORTH CAROLINA ATTORNEY GENERAL
	
	By:
	
	 /s/ JESSICA V. SUTTON

	JESSICA V. SUTTON
	Assistant Attorney General
	JENNIFER HARROD
	Special Deputy Attorney General
	North Carolina Department of Justice
	P.O. Box 629
	Raleigh, NC 27602

  

			
	Dated:	 	 1/13/17

  
 -61- 

			
	For the State of Oregon:
	
	ELLEN F. ROSENBLUM
	ATTORNEY GENERAL
		
	By:	 	 /s/ TIM D. NORD

		 	TIM D. NORD
		 	Special Counsel
		 	Civil Enforcement Division
		 	Oregon Department of Justice
		 	1162 Court Street NE
		 	Salem, OR 97301-4096

  

					
		 	Dated:	 	 1/13/17

 

			
		 	 /s/ KATHERINE A. CAMPBELL

		 	KATHERINE A. CAMPBELL
		 	Assistant Attorney General
		 	Civil Enforcement Division
		 	Oregon Department of Justice
		 	100 SW Market Street
		 	Portland, OR 97201

  

					
		 	Dated:	 	 Jan. 13, 2017

  
 -62- 

			
	For the Commonwealth of Pennsylvania:
	
	BRUCE R. BEEMER
	ATTORNEY GENERAL
		
	By:	 	 /s/ NEIL F. MARA

		 	NEIL F. MARA
		 	Chief Deputy Attorney General
		 	14th Floor, Strawberry Square
		 	Harrisburg, PA 17120

			
		
	Dated:	 	 1-13-17

  
 -63- 

			
	For the State of South Carolina:
	
	ALAN WILSON
	Attorney General and Securities Commissioner
		
	By:	 	 /s/ ROBERT BOLCHOZ

		 	ROBERT BOLCHOZ
		 	Chief Deputy Attorney General
		 	Office of the Attorney General
		 	P.O. Box 11549
		 	Columbia, SC 29211

			
		
	Dated:	 	 1/13/17

  
 -64- 

	
	For the State of Washington:
	
	 /s/ ROBERT W. FERGUSON

	ROBERT W. FERGUSON
	Attorney General of Washington
	800 5th Avenue, Suite 2000
	Seattle, WA 98104

  

			
	Dated:	 	 January 13, 2017

  
 -65- 

 ANNEX 1: STATEMENT OF FACTS 

 

	I.	OVERVIEW 

 1. Between January 2004 and May 2010 (herein “the relevant time
period”), Moody’s Investors Service, Inc., a wholly-owned subsidiary of Moody’s Corporation (herein collectively “Moody’s”), was a Nationally Recognized Statistical Rating Organization (“NRSRO”). 

2. For a fee, Moody’s issued alphanumeric credit ratings of structured finance instruments, including Residential Mortgage-Backed
Securities (“RMBS”) and Collateralized Debt Obligations (“CDOs”). Moody’s also issued credit ratings of corporate bonds and other types of structured finance instruments, financial and
non-financial entities, and governments, among other things. 
 3. Moody’s made statements,
including in publicly available documents, regarding the policies, procedures, and methodologies for its RMBS and CDO credit ratings, among other topics. 

4. During the relevant time period, it was generally understood in the structured finance market that the investment practices of many
investors, including banks, were governed by law, regulation, and/or internal investment policies, which often used credit ratings to set minimum credit quality thresholds. 
  

	II.	MOODY’S PUBLICATIONS REGARDING THE OBJECTIVITY AND INDEPENDENCE OF ITS CREDIT RATINGS 

5. In June 2005, Moody’s published, and thereafter consistently maintained on its public website (www.moodys.com), a Code of Professional
Conduct (“Moody’s 2005 Code”). Moody’s 2005 Code was a set of principles voluntarily adopted based on the International Organization of Securities Commissions Code of Conduct Fundamentals for Credit Rating Agencies, by which all
Moody’s Investors Service, Inc. employees were expected to abide. 
 6. Moody’s 2005 Code set forth its general policies to
promote Moody’s stated objectives of integrity, objectivity, and transparency of the credit rating process. Section III(2)(A) of Moody’s 2005 Code, titled “Independence and Management of Conflicts of Interest,” stated: 

2.2 Moody’s and its Analysts will use care and professional judgment to maintain both the substance and appearance of independence and
objectivity. 
 2.3 The determination of a Credit Rating will be influenced only by factors relevant to the credit assessment. 

2.4 The Credit Rating Moody’s assigns to an Issuer, debt or debt-like obligation will not be affected by the existence of, or potential
for, a business relationship between Moody’s (or its affiliates) and the Issuer (or its affiliates) or any other party, or the non-existence of any such relationship. 

 7. Moody’s 2005 Code also contained a section captioned the “Quality of the Rating
Process,” which stated: 
 1.4 ... Credit ratings will reflect consideration of all information known, and believed to be relevant,
by the applicable Moody’s Analyst and rating committee, in a manner generally consistent with Moody’s published methodologies.... 

1.6 Moody’s and its Analysts will take steps to avoid issuing any credit analyses, ratings or reports that knowingly contain
misrepresentations or are otherwise misleading as to the general creditworthiness of an Issuer or obligation. 
 8. Moody’s 2005 Code
also included Section III(1)(C), titled “Integrity of the Rating Process,” which stated: 
 1.12 Moody’s and its Employees
will deal fairly and honestly with Issuers, investors, other market participants, and the public. 
 9. Moody’s 2005 Code also
contained a section captioned “Transparency and Timeliness of Ratings Disclosure,” which stated: 
 3.13 Moody’s will publicly
disclose via press release and posting on moodys.com any material modifications to its rating methodologies and related significant practices, procedures, and processes. Where feasible and appropriate, disclosure of such material modifications will
be made subject to a “request for comment” from market participants prior to their implementation. 
 10. In October 2007,
Moody’s reissued its Code of Conduct, which included the same statements of policy quoted above that were included in Moody’s 2005 Code. 

11. During the relevant time period it was generally understood that potential conflicts of interest existed in Moody’s business model.
Moody’s acknowledged this in public statements, including for example, in a July 28, 2003 letter to the United States Securities and Exchange Commission, in which Moody’s stated that “the rating agency model which has developed
is an ‘issuer fee-based’ model. This model has two intrinsic conflicts of interest which must be effectively managed: a) issuers pay rating agencies for their credit opinions; and, b) issuers are one
source of input in a rating agency’s formation of its opinion....” Moody’s further stated in a July 12, 2004 letter to the Securities and Exchange Commission: “Because ratings have become an important means of conveying
information in the ABS market, the independence of rating agencies and the objectivity of rating opinions are important. Yet, it is the issuing entities that pay the majority of credit rating agency fees, exposing the industry to latent conflicts of
interest.” 

  
 -2- 

 12. This tension, in many cases, was passed on to the managing directors, who were given both
market share and ratings quality targets and asked to manage any tension. One managing director, reflecting on his experience with rating corporate bonds, wrote in October 2007 that “on the one hand, we need to win business and maintain market
share, or we cease to be relevant. On the other hand, our reputation depends on maintaining ratings quality.... For the most part, we hand the dilemma off to the team [managing directors] to solve.” 

 

	III.	MOODY’S PUBLICATIONS AND STATEMENTS ABOUT ITS MODELS, METHODOLOGIES, AND EXPECTED LOSS APPROACH FOR RATING RMBS AND CDOS 

13. Moody’s published its RMBS and CDO credit rating models and methodologies to the public and represented that it applied them when
determining the credit ratings of RMBS and CDOs. 
 14. Moody’s consistently stated, in both written publications and Congressional
testimony, that its RMBS and CDO credit ratings “primarily address the expected credit loss an investor might incur,” which included an assessment of both the “probability of default” and “loss given default” of rated
tranches. This approach was distinct from the approach used by Moody’s competitors, including Standard & Poor’s and Fitch. 

15. Moody’s publicly stated in its August 2004 Rating Symbols and Definitions publication that: 

It should be noted that Moody’s long-term ratings are intended to be measures of expected loss, and therefore incorporate elements of both
probability of default and severity of loss in the event of default. 
 Consequently there will be trade-offs between these two elements,
such that defaulted obligations with low expected severity of loss may be assigned ratings in the upper speculative grade ranges. 

Moody’s long-term obligation ratings are opinions of the relative credit risk of fixed-income obligations with an original maturity of one
year or more. They address the possibility that a financial obligation will not be honored as promised. Such ratings reflect both the likelihood of default and any financial loss suffered in the event of default. 

16. Moody’s publicly stated in its March 2007 Rating Symbols and Definitions publication that: 

Moody’s maintains two separate bond rating systems, or scales. One mapping – Moody’s Global Scale – applies to ratings
assigned to nonfinancial and financial institutions, sovereigns and subsovereign issuers outside the United States, and structured finance obligations.2 [Footnote 2: Moody’s structured
finance 

  
 -3- 

 
ratings are engineered to replicate the expected loss content of Moody’s Global Scale. The trade-off between probability of default and severity of
loss given default may vary within the structured finance sector depending on asset type.] The Global Scale is a mapping between rating categories and relative expected loss rates across multiple horizons. Expected loss comprises an assessment of
probability of default as well as expectation of loss in the event of default. It is Moody’s intention that the expected loss rate associated with a given rating symbol and time horizon be the same across obligations and issuers rated on the
Global Scale. Moody’s rating methodologies, rating practices and performance monitoring systems are each designed to ensure a consistency of meaning. 

Moody’s ratings on long-term structured finance obligations primarily address the expected credit loss an investor might incur on or
before the legal final maturity of such obligations vis-à-vis a defined promise. As such, these ratings incorporate Moody’s assessment of the default
probability and loss severity of the obligations. They are calibrated to Moody’s Global Scale. 
 17. One way in which Moody’s
sought to attain consistency for certain structured finance products, including CDOs, was through the application of its published “Idealized Expected Loss” (“IEL”) table (attached hereto as Attachment 1), which was developed in
1989. Another way Moody’s sought to maintain consistency for certain structured finance products, including RMBS, was through the application of its Internal Rate of Return Reduction Table (“IRR Reduction Table”), which was derived
from the 10-year IEL targets. Moody’s also sought to maintain consistency through observation and monitoring of the historical performance of its ratings. 

 

	IV.	MOODY’S RMBS CREDIT RATINGS 

  

	 	A.	Moody’s Expected Loss Credit Rating Approach and IRR Reduction Table 

 18.
Moody’s publicly stated that it rated RMBS according to its expected loss approach and that Moody’s RMBS ratings, like its other structured finance ratings, were intended to be consistent in meaning with corporate bond ratings and other
structured finance ratings subject to “the trade-off between” probability of default and severity of loss given default across asset types. After the internal introduction of tranching tools in 2001
as described below, in determining credit ratings for RMBS, Moody’s did not calculate a specific loss given default for any RMBS tranches below Aaa, and therefore did not calculate the expected loss for RMBS tranches below Aaa. The tranching
tools also did not incorporate the IRR Reduction Table. Instead, as explained below, Moody’s used tranching tools that were designed to replicate the ratings achieved under an earlier, but no longer used, approach that involved a calculation of
expected loss on each tranche. 

  
 -4- 

 19. In November 1996, Moody’s published a comprehensive RMBS Rating Methodology describing
its credit rating approach for prime, Alt-A, and subprime RMBS. Although Moody’s published numerous special comments and other periodic updates regarding its RMBS rating approach, it did not publish
another comprehensive RMBS Rating Methodology until December 2008. 
 20. Moody’s 1996 RMBS Rating Methodology stated that
“Moody’s structured finance ratings address both frequency of default on the securities as well as severity of loss in the event of default.” 

21. The 1996 RMBS Rating Methodology further stated that: 

With the lifetime pool loss distribution in hand, we can determine the expected loss of any supported tranche. We do this by calculating the
change in yield due to credit risk for each tranche, a technique that appeals to the way in which investors conceptualize and price for credit risk.... 

The expected dollar loss for the supported tranche is the sum (across all possible loss outcomes) of the product of unsupported losses times
the probability of those losses occurring. 
 By dividing this expected dollar loss by the size of the supported tranche, we have an estimate
of lifetime losses, in percent terms. We also have a basis by which we can compare loss potential across security types. 
 22. The 1996
RMBS Rating Methodology also stated that “[t]o achieve consistency with loss potential on all rated corporate bonds, we compiled a schedule of basis point changes [the IRR Reduction Table] paired with corresponding rating categories. Knowing
the rating desired for the supported tranche, we can back into the credit support needed to achieve that rating.” As the publication indicated, this comparison was a means to achieving Moody’s stated goal, referenced in Paragraph 17 above,
of consistency of meaning among Moody’s structured finance and corporate bond ratings. 
 23. In 2001, Moody’s began using
internal “tranching tools” to rate RMBS. The tranching tools did not adjust required credit enhancement levels based on the size of RMBS tranches, nor did they calculate the loss given default or expected loss of any RMBS tranches.
Instead, using the expected loss of a collateral pool and Aaa tranche required credit enhancement values provided by a Moody’s rating committee as inputs, the RMBS tranching tools determined the required credit enhancement levels for proposed
RMBS tranches based on a “simple arithmetic algorithm” that did not calculate the loss given default or expected loss of those tranches. The tranching tools also did not incorporate the IRR Reduction Table. The tranching tools were
designed to replicate the ratings that had been assigned based on a previous model that did calculate expected loss for each tranche and incorporated the IRR Reduction Table. Moody’s RMBS group also developed special internal rules that
required additional credit enhancement for thinner tranches, but those rules did not involve a calculation of expected loss for each such tranche. 

  
 -5- 

 24. Moody’s RMBS tranching tools’ algorithm also incorporated a fixed rule that, for
every RMBS, the required credit enhancement level for a given tranche to receive a B2 rating was equal to the collateral pool’s expected loss level. This assumption affected the tranching tools’ outputs of required credit enhancement
levels for all RMBS rating levels below Aaa. Moody’s RMBS Group understood that B2 credit enhancement was not equal to collateral pool expected loss. And later concluded, as reflected in a January 2007 internal memorandum: “The Sensitivity
Around B2 and EL Issue: Historically we have used B2 and EL inter-changeably. That is NOT correct. B2 represents a higher rating stress than EL... [S]uffice it to say that the topic is pretty sensitive and therefore avoid referring to the EL as
B2.” 
 25. In September 2006, Moody’s RMBS group hosted an event to publicly introduce its new subprime RMBS rating model,
Moody’s Mortgage Metrics for Subprime (“M3 Subprime”). Moody’s slide deck for this presentation stated that “Moody’s Mortgage Metrics for Subprime is a Combination of Models ... [including] A tranching tool that
matches expected losses to Moody’s guidelines.” 
 26. Beginning in at least 2006 and continuing through 2008, Moody’s Asset
Finance Group (“AFG”) and RMBS group leaders met regularly to discuss how to implement an RMBS expected loss rating approach that would incorporate an assessment of the expected loss of each rated RMBS tranche. An objective of this effort
was to maintain approximately the same credit enhancement levels as those generated by using Moody’s tranching tools. In October 2006, high-level managers in Moody’s AFG and RMBS groups decided to “drill deeper into RMBS
tranching” with the stated goal of “minimiz[ing] change in enhancement levels while confirming an idealized loss methodology” for all of Moody’s RMBS ratings. 

27. In October 2007, a Moody’s AFG senior manager noted the following about Moody’s RMBS ratings derived from its tranching tools:
“I think this is the biggest issue TODAY. [A Moody’s AFG Senior Vice President and research manager]’s initial pass shows that our ratings are 4 notches off.” Similarly, notes from a meeting of the Structured Finance Credit
Committee (“SCC”) that same month state that “the [Structured Finance Group] team will have to re-address the issue of whether Home Equity RMBS ratings truly reflect expected loss, as stated by
Moody’s, or are actually closer to probability of default ratings.” 
  

	V.	MOODY’S CDO CREDIT RATINGS 

  

	 	A.	Moody’s Use of the Geometric Mean for Assigning Aaa CDO Credit Ratings 

 28.
Commencing in April 2004, Moody’s did not follow its published IEL targets in rating many Aaa tranches of CDOs. On March 18, 2004, an internal memorandum forwarded to Moody’s Structured Finance executives stated that Moody’s
“may not be able to compete in synthetics [i.e., synthetic CDOs] with current Aaa standard,” noting that it originally had been made more conservative compared to the “historical corporate Aaa default rates.” 

29. On April 15, 2004, Moody’s SCC voted to convene a task force to research whether it should revise its IEL targets and, pending
the results of that research, to authorize use 

  
 -6- 

 
of the geometric mean, or “geomean” between the IEL targets for the Aaa and Aa1 rating levels when rating Aaa tranches of static synthetic CDOs. The minutes of this SCC meeting
identified what it referred to as a “short term CDO problem”: “[t]here is a huge discrepancy between Aaa idealized rates and historical [corporate default] rates.” The minutes also noted the “extreme conservatism of the Aaa
target,” which “has become a serious business issue for synthetics.” The minutes also stated that “Aaa EL targets are extraordinarily conservative
vis-à-vis other rating targets and far more conservative in comparison to historical corporate default rates than any other rating level,” and that the Monte
Carlo simulation applicable to static synthetic CDOs allowed “a high degree of precision in calculating EL.” The minutes further stated that use of the geomean was “certainly ad hoc, but appears to be justified given the very
conservative Aaa target.” The minutes also stated that “[n]o formal announcement [of this decision] would be made.” Thereafter, Moody’s hard-coded this geomean target into its publicly available CDOROM rating model used to rate
static synthetic CDOs. Moody’s publications, methodologies and press releases did not state that the more lenient geomean target was being used in CDOROM in lieu of Moody’s published Aaa IEL target. Further, the use of the geomean target
would not have been readily apparent to an external user of CDOROM. 
 30. By 2005, Moody’s authorized use of the more lenient geomean
target to determine Aaa credit ratings for cash flow CDOs. Many arrangers and issuers were aware that Moody’s was now using the more lenient geomean target for cash and synthetic Aaa CDO tranches, but Moody’s did not issue a publication to
the general market addressing this issue. 
 31. From 2004 through 2006, a group of Moody’s employees known as the Idealized Loss
Project team (“ILP team”), which was established and overseen by Moody’s SCC, evaluated whether the expected loss targets set forth in Moody’s IEL table should be changed. In 2005, the ILP team proposed possible changes to the
table. The SCC voted to conditionally accept the proposed changes to the IEL table. Upon further review, the SCC voted to reject the proposed changes, leaving the original IEL table in place. 

32. Following its rejection of the proposed changes to the IEL table, Moody’s SCC voted in May 2006 to authorize all Structured Finance
rating groups to decide whether to use the IEL Aaa target or either the geomean or the arithmetic mean (an even more lenient standard) between the published IEL targets for Aaa and Aa1, “leaving it to the various business units to make their
decisions based on associated risks.” Despite this formal expansion of the authorization to use the geomean, or alternatively, the arithmetic mean in assigning Aaa ratings to CDO tranches, Moody’s did not issue a publication about this
decision. 
 33. By using the geomean rather than the IEL targets, Moody’s issued Aaa ratings for some CDO tranches that did not meet
its published IEL targets because the rated tranches were allowed to have higher expected loss estimates than Moody’s IEL targets. Had Moody’s followed its published IEL targets in rating those Aaa CDO tranches, Moody’s would have
required additional credit enhancement to issue a Aaa rating. 
 34. In November 2008, following the mass downgrades of many of its CDO
ratings, Moody’s ceased using the geomean target for assigning Aaa ratings to CDO tranches. Moody’s internally changed its approach to using the published Aaa expected loss targets, but Moody’s did not inform investors or the public
of this change. A manager in the CDO group noted in 

  
 -7- 

 
August 2009 that: “The difficulty will be in explaining the changes in the target that were instituted in 200[4].” In 2010, Moody’s removed the hard-coding of the geomean from its
CDOROM model and announced that “outputs in CDOROM have been made approximately half a notch more conservative at the Aaa level....,” but did not identify the prior inclusion of the geomean in the model. 

 

	 	B.	Moody’s Use of Present-Valued Model Outputs and Non-Present-Valued IEL Targets 

35. Moody’s publicly stated that its ratings of structured finance tranches represented its opinion of the present value of the expected
losses to noteholders. In a publication dated July 29, 2003 discussing Moody’s use of the Binomial Expansion Technique and similar methodologies, Moody’s stated: “Moody’s rating on each rated note represents our opinion of
the expected loss on the note, which is the difference between the present value of the expected payments on the note and the present value of the promised payments under the note, expressed as a percentage of the present value of the promise.”

 36. An internal memorandum prepared for a December 16, 2004 SCC meeting noted an inconsistency, stating: “Rating
models/methodologies generally discount realized cash flows and express losses on a present value basis. The [IEL] targets ignore time value and do not discount. The level of interest rates affects the expected loss results from the rating models,
but not the targets. Ratings easier to achieve in high interest rate environment.” At least one Moody’s analyst noted on December 8, 2004 that this inconsistent use of present-value discounts was “wrong.” Another analyst
stated about the impact of recalculating the IEL table on a present value basis that “over a 10 y[ear period, the] max change is one notch difference.” 

37. In 2005, at the direction of Moody’s SCC, the ILP team included a present value discount in the new proposed IEL table it was
preparing. Following the SCC’s decision to reject the proposed IEL table, Moody’s continued to use the existing, non-present valued targets, which made “[r]atings easier to achieve in high
interest rate environment.” 
 38. Moody’s publicly available User Guide for CDOROM stated that it present-value discounted its
expected loss output. Moody’s did not state that the IEL table was not also present valued. Instead, a user would have to infer that the IEL targets were not present-valued based on Moody’s use of a single fixed recovery rate in the table.

  

	 	C.	The Impact of Underlying Collateral Ratings on Moody’s CDO Ratings 

 39.
Moody’s knew that the ratings on the underlying RMBS and CDO collateral in CDOs were important factors in its determination of the credit ratings it assigned to CDOs. 

40. Prior to the Spring of 2007, Moody’s used IEL targets as inputs to its rating model for rating CDOs squared (CDOs backed by other
CDOs). In the Spring of 2007, Moody’s senior CDO rating managers acknowledged internally that some CDOs squared that Moody’s was asked to rate included Aaa rated tranches of CDOs that Moody’s had initially rated using the geomean
target rather than its more stringent published IEL target. 

  
 -8- 

 41. In May 2007, Moody’s started applying a default probability stress as part of its rating
analysis of CDOs squared backed by Aaa assets to address the higher expected loss limit of the geomean. A Moody’s analyst subsequently explained that “we are applying the geo mean [sic] default probability stress because when we rate the
Aaa liabilities that are getting subsequently securitized ... we rate them to the geo mean (for Aaa rated notes) and not the hurdle” and that “when we assess the [default probability] for the assets, we need to take into account that
the Aaa rating on these underlying tranches was based on the geo mean and not the hurdle.” 
  

	 	D.	Moody’s Correlation Assumptions for CDO Ratings 

 42. In November 2004, Moody’s
published a Rating Methodology that stated that the degree to which the assets within CDOs were correlated was an important factor in its assignment of CDO ratings. If assets in a CDO have a high default correlation, they are more likely to default
at the same time. Moreover, Moody’s published that CDO tranches backed by highly correlated assets would typically experience a higher expected loss. 

43. During 2004 and 2005, issuers of CDOs began increasingly structuring the securities with higher concentrations of specific asset types,
thus increasing the risk of correlated default and necessitating a more precise methodology for estimating correlation. Moody’s acknowledged this increased concentration of specific asset types for CDOs of RMBS assets and stated in a September
2005 publication that, “Over the past year and a half, the structured finance cash flow CDO transactions have seen an increased concentration in a single asset sector, mainly RMBS, in the collateral pools.... To better assess and capture
this ... effect, Moody’s introduced a new modeling framework in August last year [2004], the Correlated Binomial Method .... ” 

44. Moody’s developed new correlation assumptions for corporate bond and structured finance assets for use in its revised CDO rating
models, known as CDOROM and CBET, issued in 2004 and 2005, respectively. 
 45. During the development process, Moody’s correlation
working group identified four CDOs (two CDOs of RMBS, one multi-sector CDO, and one CDO squared) in order to conduct impact testing of various proposed correlation assumptions. The testing on the two CDOs of RMBS showed that these CDOs had higher
expected losses under the old correlations under the Binomial Expansion Technique (“BET”) than under the new correlations using both its CDOROM and CBET models. For these two RMBS CDOs, the old correlations and the BET would therefore have
required more credit enhancement than the new correlations and the new models to achieve the same ratings. For the multi-sector CDO Moody’s tested, the old approach and new approach produced similar results; and for the CDO squared, the new
approach produced higher expected losses. 
 46. Also while the development process for corporate bond correlations was underway, a
Moody’s analyst (who was not a member of the correlations working group) consulted individuals employed by financial institutions that issued CDOs. In an email sent in March 2004 concerning correlations for corporate bonds, the Moody’s CDO
rating analyst reported to senior Moody’s CDO managers (including members of the correlations working 

  
 -9- 

 
group) that “I realized that we are not going to rate any synthetic transaction by them [i.e., those financial institutions] if we do not get compatible subordinations with
S&P’s.” The analyst continued: “The correlations will be a big problem. As the correlations increase our Aaa will be even harder to achieve....” 

47. In a February 23, 2005 email, Moody’s CDO managers recognized that, “Apparently, the change to our ABS correlations
have made us more competitive; however, we still come in higher than S&P - which is amazing given the suboridnation [sic] levels for our cash flow CDOs would go down if we applied the new correlations without any other changes to our
methodology.” 
 ATTACHMENT 1 
  

																																									
	Table 2	 
	Moody’s “Idealized” Cumulative Expected Loss Rates (%)	 
	Year	 
	 Rating
	  	1	 	  	2	 	  	3	 	  	4	 	  	5	 	  	6	 	  	7	 	  	8	 	  	9	 	  	10	 
	 Aaa
	  	 	0.000028	  	  	 	0.00011	  	  	 	0.00039	  	  	 	0.00099	  	  	 	0.00160	  	  	 	0.00220	  	  	 	0.00286	  	  	 	0.00363	  	  	 	0.00451	  	  	 	0.00550	  
	 Aa1
	  	 	0.000314	  	  	 	0.00165	  	  	 	0.00550	  	  	 	0.01155	  	  	 	0.01705	  	  	 	0.02310	  	  	 	0.02970	  	  	 	0.03685	  	  	 	0.04510	  	  	 	0.05500	  
	 Aa2
	  	 	0.000748	  	  	 	0.00440	  	  	 	0.01430	  	  	 	0.02585	  	  	 	0.03740	  	  	 	0.04895	  	  	 	0.06105	  	  	 	0.07425	  	  	 	0.09020	  	  	 	0.11000	  
	 Aa3
	  	 	0.001661	  	  	 	0.01045	  	  	 	0.03245	  	  	 	0.05555	  	  	 	0.07810	  	  	 	0.10065	  	  	 	012485	  	  	 	0.14960	  	  	 	0.17985	  	  	 	0.22000	  
	 A1
	  	 	0.003196	  	  	 	0.02035	  	  	 	0.06435	  	  	 	0.10395	  	  	 	0.14355	  	  	 	0.18150	  	  	 	0.22330	  	  	 	0.26400	  	  	 	0.31515	  	  	 	0.38500	  
	 A2
	  	 	0.005979	  	  	 	0.03850	  	  	 	0.12210	  	  	 	0.18975	  	  	 	0.25685	  	  	 	0.32065	  	  	 	0.39050	  	  	 	0.45595	  	  	 	0.54010	  	  	 	0.66000	  
	 A3
	  	 	0.021368	  	  	 	0.08250	  	  	 	0.19800	  	  	 	0.29700	  	  	 	0.40150	  	  	 	0.50050	  	  	 	0 61050	  	  	 	0.71500	  	  	 	0.83600	  	  	 	0.99000	  
	 Baa1
	  	 	0.049500	  	  	 	0.15400	  	  	 	0.30800	  	  	 	0.45650	  	  	 	0.60500	  	  	 	0.75350	  	  	 	0.91850	  	  	 	1.08350	  	  	 	1.24850	  	  	 	1.43000	  
	 Baa2
	  	 	0.093500	  	  	 	0.25850	  	  	 	0.45650	  	  	 	0.66000	  	  	 	0.86900	  	  	 	1.08350	  	  	 	1.32550	  	  	 	1.56750	  	  	 	1.78200	  	  	 	1.98000	  
	 Baa3
	  	 	0.231000	  	  	 	0.57750	  	  	 	0.94050	  	  	 	1.30900	  	  	 	1.67750	  	  	 	2.03500	  	  	 	2.38150	  	  	 	2.73350	  	  	 	3.06350	  	  	 	3.35500	  
	 Ba1
	  	 	0.478500	  	  	 	1.11100	  	  	 	1.72150	  	  	 	2.31000	  	  	 	2.90400	  	  	 	3.43750	  	  	 	3.88300	  	  	 	4.33950	  	  	 	4.77950	  	  	 	5.17000	  
	 Ba2
	  	 	0.858000	  	  	 	1.90850	  	  	 	2.84900	  	  	 	3.74000	  	  	 	4.62550	  	  	 	5.37350	  	  	 	5.88500	  	  	 	6.41300	  	  	 	6.95750	  	  	 	7.42500	  
	 Ba3
	  	 	1.545500	  	  	 	3.03050	  	  	 	4.32850	  	  	 	5.38450	  	  	 	6.52300	  	  	 	7.41950	  	  	 	8.04100	  	  	 	8.64050	  	  	 	9.19050	  	  	 	9.71300	  
	 B1
	  	 	2.574000	  	  	 	4.60900	  	  	 	6.36900	  	  	 	7.61750	  	  	 	8.86600	  	  	 	9.83950	  	  	 	10.52150	  	  	 	11.12650	  	  	 	11.68200	  	  	 	12.21000	  
	 B2
	  	 	3.938000	  	  	 	6.41850	  	  	 	8.55250	  	  	 	9.97150	  	  	 	11.39050	  	  	 	12.45750	  	  	 	13.20550	  	  	 	13.83250	  	  	 	14.42100	  	  	 	14.96000	  
	 B3
	  	 	6.391000	  	  	 	9.13550	  	  	 	11.56650	  	  	 	13.22200	  	  	 	14.87750	  	  	 	16.06000	  	  	 	17 05000	  	  	 	17.91900	  	  	 	18.57900	  	  	 	19.19500	  
	 Caa
	  	 	14.300000	  	  	 	17.87500	  	  	 	21.45000	  	  	 	24.13400	  	  	 	26.81250	  	  	 	28.60000	  	  	 	30.38750	  	  	 	32.17500	  	  	 	33.96250	  	  	 	35.75000	  

  
 -10- 

 ANNEX 2 

 MOODY’S COMPLIANCE COMMITMENTS 

Moody’s Corporation (“MCO”) and Moody’s Investors Service, Inc. (“MIS”) have implemented a number of compliance
measures both before and after the financial crisis to promote the integrity and independence of Moody’s credit ratings. MCO and MIS agree, as set forth in Section I below, to maintain these existing measures for a period of no less than five
(5) years following the Effective Date of this Agreement. In addition, MIS and MCO have further agreed to implement new measures designed to further promote the integrity and independence of Moody’s credit ratings. These additional
measures, which are set forth in Section II below, also shall remain in place for a period of no less than five (5) years. 
 Section I. 

 

	 	A.	Maintenance of Codes of Conduct 

  

	 	(1)	MCO agrees to maintain and publish on Moodys.com a code of business conduct designed to promote ethical business practices (the “MCO Code of Business Conduct”). 

 

	 	(2)	MIS agrees to maintain and publish on Moodys.com a code of professional conduct designed to promote the quality and integrity of its rating process (the “MIS Code of Professional Conduct”). 

 

	 	(3)	MIS agrees to maintain policies and procedures to effectuate the MIS Code of Professional Conduct. 

  

	 	(4)	MIS agrees to maintain a training program for all of its employees regarding the MIS Code of Professional Conduct. 

  

	 	B.	Separation of Moody’s Commercial and Credit Rating Functions 

  

	 	(1)	MIS agrees to separate the commercial functions of its rating business, including intake of requests for new ratings, fee negotiation, marketing, sales and having commercial-related discussions with existing and
potential new customers, from analytical personnel responsible for assigning credit ratings, in a manner consistent with the MCO Code of Business Conduct and the MIS Code of Professional Conduct. 

 

	 	(2)	MIS agrees that personnel with responsibility for commercial functions will be excluded from: (a) determining or monitoring credit ratings, and (b) developing or approving credit rating methodologies.

  

	 	(3)	MIS agrees that analytical personnel will be excluded from (a) the process of negotiating fees with issuers, and (b) accessing certain categories of commercial information, as set forth in MIS policies and
procedures. 

  

	 	(4)	MIS will maintain policies and procedures in furtherance of Sections B(1), (2) and (3). 

	 	C.	Separation of Credit Rating and Non-Credit Rating Businesses 

  

	 	(1)	MCO agrees to operationally separate MIS and its credit rating business from MCO’s non-credit rating businesses in a manner consistent with the MCO Code of Business Conduct
and the MIS Code of Professional Conduct. 

  

	 	(2)	MIS agrees to restrict its personnel from sharing non-public information received from issuers, and information regarding non-public rating
actions, with personnel of non-MIS subsidiaries of MCO, other than in a manner consistent with MCO and MIS policies and procedures. 

 

	 	D.	Independent Review and Approval of Changes to Credit Rating Methodologies 

  

	 	(1)	MIS agrees to maintain a function, separate from the function responsible for assigning credit ratings, the purpose of which is to develop new credit rating methodologies and revise existing credit rating methodologies.

  

	 	(2)	MIS agrees to maintain a function, independent from the function responsible for assigning credit ratings, the purpose of which is to review and approve new credit rating methodologies and material changes to existing
credit rating methodologies. 

  

	 	(3)	Moody’s agrees to review its credit rating methodologies on an annual basis. 

  

	 	E.	Review of Application of Published Credit Rating Methodologies 

  

	 	(1)	MIS agrees to monitor the consistent application of credit rating methodologies by conducting reviews of credit rating actions, on a sampled basis. 

 

	 	F.	Compensation of Certain Types of Employees 

  

	 	(1)	MIS agrees to consider the aggregate performance of Moody’s credit ratings as a factor in the compensation of the President of MIS, the Global Head of the Commercial Group, the Global Head of Relationship
Management, and the Head of Structured Finance. 

  

	 	(2)	MIS agrees to determine the variable component of the compensation of all analytical personnel, including managing directors, based on the aggregate financial performance of MIS and not the financial performance of
their individual business units. 

  

	 	(3)	MIS agrees to determine compensation (including bonus) for the Chief Credit Officer and bonus-eligible employees in Compliance and the MIS Credit Strategy and Standards Methodology Review Group without regard to the
financial performance of MCO. 

  
 -3- 

	 	G.	Analyst Training 

  

	 	(1)	MIS agrees to maintain, and update as appropriate in its discretion, its current mandatory line-of-business specific training regime for
rating analysts. 

  

	 	(2)	MIS agrees to require rating analysts to meet internal standards before voting in a rating committee. 

  

	 	(3)	MIS agrees to maintain policies and procedures in furtherance of Sections G(1) and (2). 

 Section II.

  

	 	H.	Enhancements to Oversight and Technology 

  

	 	(1)	MIS agrees to develop and maintain a function responsible generally for monitoring the consistency of key disclosures in press releases regarding credit ratings. 

 

	 	(2)	MIS agrees to develop and maintain a function responsible for overseeing that the work of the groups responsible for the development, review and approval of methodologies is carried out on a timely basis.

  

	 	(3)	MIS agrees to develop and deploy a new centralized technological platform for the creation and review of credit rating documentation. This platform will include a central system for creating and accessing credit rating
documentation, confirming that credit rating personnel complete necessary procedural steps in the credit rating process, and that credit rating announcements contain appropriate information. 

 

	 	(4)	MIS agrees to develop and deploy an improved centralized electronic document management and retention system, which will include information received and analyzed during the credit rating process, and vital records
under its record retention policy generated during the credit rating process. 

  

	 	(5)	MCO agrees to realign its internal audit reporting structure such that its internal audit group will report directly to the Chief Executive Officer of MCO. 

  
 -4- 

 Section III. 
  

	 	I.	Certification 

  

	 	(1)	MCO agrees that beginning twelve months from the Effective Date of this Agreement, and on an annual basis for a period of 4 years afterwards, the CEO of MCO will conduct a review of the maintenance of the measures
outlined in this Annex during the preceding twelve-month period. The review may be based on, among other things, updates or reviews conducted by MIS’s Compliance Department, the Internal Audit Department or the Credit Strategy and Standards
Group about the programs and processes MCO and MIS have had in place to implement and maintain the measures outlined in this Annex during the preceding twelve-month period. 

 

	 	(2)	Based on the review described above, the CEO of MCO will provide a certification to the government (at the addresses listed below) that, to the best of his or her knowledge, during the preceding twelve-month period MCO
and MIS continued to maintain the measures outlined in this Annex. The certification shall summarize the review described above that was conducted to provide the required certification. 

 

	 	(3)	The CEO of MCO shall submit the certification to: 

 United States Attorney for the District of
New Jersey 
 United States Attorney’s Office for the District of New Jersey 

970 Broad Street, 7th Floor Newark, NJ 07102 

- and - 
 Director, Consumer
Protection Branch 
 U.S. Department of Justice 

450 5th Street NW 
 Washington,
DC 20530. 
  

	 	(4)	The CEO of MCO will also submit a copy of the certification to the States at the addresses of the signatories to this Agreement. 

  

	 	(5)	The CEO of MCO will also provide a copy of the certification to the Chairman of the Board of MCO. 

  

	 	(6)	If the CEO of MCO is unable to provide any part of this certification regarding the maintenance by MCO and MIS of the measures outlined in this Annex, the CEO shall provide a detailed explanation for why such
certification is unable to be provided. 

  
 -5-

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