ESG Global Rating Methodology

Introduction

This document sets forth Kroll Bond Rating Agency, LLC and its rating affiliates’ (collectively, “KBRA”), methodology for evaluating environmental, social, and governance (ESG) factors in credit ratings. It should be noted that the specific factors that are relevant to credit can vary by sector, industry, and transaction. This methodology provides a framework for how ESG factors are considered in the credit rating process across sectors. This publication is not used, in and of itself, to produce credit ratings, but will be used only in conjunction with sector specific credit rating methodologies.

Overview of KBRA’s ESG Approach

As part of KBRA’s overall credit analysis, we consider ESG factors that may have a meaningful impact on credit in determining the appropriate issuer and/or issue rating, with a focus on factors that affect the risk of default and/or recovery.