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Moody's Public Finance Department Moody's Ratings and Fees for Insured Issues Assignment of Insurer's Claims -Paying Ratings to Insured Issues 4. Moody's Investors Service currently rates the insurance mss -paying ability of AMBAC Indemnity Corporation (AMBAC) Am for long -tern obligations and MIG 1 for short -tem notes. Accordingly. obligations insured by AMBAC will receive the appropriate Moody's rating. Prior to assigning a rating to an insured obligation. Moody's will verify that AMBAC's insurance policy for the issue to be insured guarantees full and timely payment of all principal and interest when due, and is permanent and unconditional for the life of the insured obligation. Upon verification of these conditions Moody's will assign the Aaa or MIG 1 rating to the insured obligation. After Moody's assigns the rating, written confirmation of that action will be provided to AMBAC and made availa- ble at the closing. The issue and its Aaa or MIG 1 rating will then be included in all Moody's published ratings directories and rating verification services. 'Moody's Requirements for Information from Issuers - In addition to our verification of the insured transaction prior to the assignment of the Aaa or MIG 1 ratings. Moody's reviews the underlying credit quality of the insured obligation. If the insured obligation is on parity with, or its repayment source is closely related to, outstanding debt which is rated by Moody's on an uninsured basis. Moody's will review the ratings on the outstanding uninsured debt prior to the closing date of the new insured obligation. Moody's will require the issuer to provide the same documents normally required for the rating of any new issue. e.g.. preliminary official statement, legal documents, financial statements. etc. Rating Fee for Insured Issues Moody's fees for insured issues are determined on the same basis as fees for non-insured issues. Such fees can be determined by calling Anita Webb (212) 553-0901 or Bernie Monis (212) 553.4055. at Moody's. Moody's billing policy is as follows: a) Each insured obligation will be billed a rating service fee. In the course of our rating review, issuers can also expect a Moody's analyst to call with questions and to request additional information. As is the case with all rating reviews, if sufricient and appropriate information is not made available Moody's may withdraw the outstanding parity or related ratings on the uninsured debt. If the insured obligation is not on parity with or related to other rated outstanding debt, Moody's still will assess (for internal purposes) the credit quality of the insured obliga- tion as a part of Moody's overall evaluation of the credit quality of the insured portfolio of AMBAC. In addition, Moody's may from time to time require updated informa- tion concerning the insured obligation. b) When insurance is purchased on an issue where Moody's has not received an application for a rating on an uninsured basis, the rating fee will be billed to the purchaser of the insurance. c) When an issue has received a Moody's rating on an uninsured basis and the issue is subsequently insured. Moody's will bill the issuer without an additional charge for the insurance rating.