B-1 STATEMENT OF ADDITIONAL INFORMATION Dated May 1 ...

F2Good credit quality. A satisfactory capacity for timely payment of financial commitments, but the marginof safety is not as great as in the case of the higher ratings.F3Fair credit quality. The capacity for timely payment of financial commitments is adequate; however, nearterm adverse changes could result in a reduction to non investment grade.BSpeculative. Minimal capacity for timely payment of financial commitments, plus vulnerability to nearterm adverse changes in financial and economic conditions.CHigh default risk. Default is a real possibility. Capacity for meeting financial commitments is solelyreliant upon a sustained, favorable business and economic environment.DIndicates an entity or sovereign that has defaulted on all of its financial obligations.Notes to Long-term and Short-term ratings: The modifiers "+" or "-" may be appended to a rating todenote relative status within major rating categories. Such suffixes are not added to the 'AAA' Long-termrating category, to categories below 'CCC', or to Short-term ratings other than 'F1'. (The +/- modifiers areonly used to denote issues within the CCC category, whereas issuers are only rated CCC without the useof modifiers.)Rating Watch: Ratings are placed on Rating Watch to notify investors that there is a reasonableprobability of a rating change and the likely direction of such change. These are designated as "Positive",indicating a potential upgrade, "Negative", for a potential downgrade, or "Evolving", if ratings may beraised, lowered or maintained. Rating Watch is typically resolved over a relatively short period.Rating Outlook: An Outlook indicates the direction a rating is likely to move over a one to two-yearperiod. Outlooks may be positive, stable or negative. A positive or negative Rating Outlook does notimply a rating change is inevitable. Similarly, ratings for which outlooks are 'stable' could be upgraded ordowngraded before an outlook moves to positive or negative if circumstances warrant such an action.Occasionally, Fitch Ratings may be unable to identify the fundamental trend. In these cases, the RatingOutlook may be described as evolving.Program ratings (such as the those assigned to MTN shelf registrations) relate only to standard issuesmade under the program concerned; it should not be assumed that these ratings apply to every issue madeunder the program. In particular, in the case of non-standard issues, i.e. those that are linked to the creditof a third party or linked to the performance of an index, ratings of these issues may deviate from theapplicable program rating.Variable rate demand obligations and other securities which contain a short-term 'put' or other similardemand feature will have a dual rating, such as AAA/F1+. The first rating reflects the ability to meetlong-term principal and interest payments, whereas the second rating reflects the ability to honor thedemand feature in full and on time.Interest Only: Interest Only ratings are assigned to interest strips. These ratings do not address thepossibility that a security holder might fail to recover some or all of its initial investment due to voluntaryor involuntary principal repayments.Principal Only: Principal Only ratings address the likelihood that a security holder will receive theirinitial principal investment either before or by the scheduled maturity date.Rate of Return: Ratings also may be assigned to gauge the likelihood of an investor receiving a certainpredetermined internal rate of return without regard to the precise timing of any cash flows.B-68