FINANCIAL INSTITUTIONS

CREDIT OPINION16 March 2018

Update

RATINGS

HSH Nordbank AGDomicile Hamburg, Germany

Long Term Debt Baa3

Type Senior Unsecured - Fgn Curr

Outlook Ratings Under Review

Long Term Deposit Baa3

Type LT Bank Deposits - Fgn Curr

Outlook Ratings Under Review

Please see the ratings section at the end of this reportfor more information. The ratings and outlook shownreflect information as of the publication date.

Analyst Contacts

Bernhard Held, CFA +49.69.70730.973VP-Senior Analystbernhard.held@moodys.com

Alexander Hendricks,CFA

+49.69.70730.779

Associate ManagingDirectoralexander.hendricks@moodys.com

Carola Schuler +49.69.70730.766MD-Bankingcarola.schuler@moodys.com

CLIENT SERVICES

Americas 1-212-553-1653

Asia Pacific 852-3551-3077

Japan 81-3-5408-4100

EMEA 44-20-7772-5454

HSH Nordbank AGUpdate following initiation of a review for upgrade of Baa3debt and deposit ratings

SummaryOn 28 February 2018, we placed on review for upgrade HSH Nordbank AG's (HSH) Baa3/P-3 debt, issuer and deposit ratings, as well as its b3 Baseline Credit Assessment (BCA), b1Adjusted BCA and Baa3(cr)/P-3(cr) Counterparty Risk (CR) Assessment.

HSH's current ratings reflect (1) its b3 BCA; (2) the b1 Adjusted BCA, which includes twonotches of rating uplift for affiliate support from Sparkassen-Finanzgruppe (S-Group, Aa2stable, BCA a21); (3) the result of our Advanced Loss Given Failure (LGF) analysis, whichprovides three notches of rating uplift for senior unsecured debt and deposits; and (4) ourmoderate government support assumptions, which result in one notch of rating uplift.

The review for upgrade of HSH's b3 BCA reflects the potential for significant improvement inthe bank's solvency profile, and reduced complexity and uncertainty about the bank's futuredirection, once the required approvals for the announced sale of the bank to a private-sectorbidder group are obtained.

The rating review will also take into consideration the bank's announced eventual exit fromS-Group and its institutional protection scheme following a multiyear transition period,which we will reflect in a significantly lower affiliate and government support assumptiononce the sale materialises.

Exhibit 1

Scorecard ratios of HSH Nordbank AG

23.4%

18.4%

-0.1%

36.1%

25.4%

-10%

0%

10%

20%

30%

40%

50%

-5%

0%

5%

10%

15%

20%

25%

Asset Risk:Problem Loans/

Gross Loans

Capital:Tangible Common

Equity/Risk-WeightedAssets

Profitability:Net Income/

Tangible Assets

Funding Structure:Market Funds/

Tangible BankingAssets

Liquid Resources:Liquid Banking

Assets/TangibleBanking Assets

Solvency Factors (LHS) Liquidity Factors (RHS)

HSH Nordbank AG (BCA: b3) Median b3-rated banks

So

lve

ncy F

acto

rs

Liq

uid

ity F

acto

rs

Source: Moody's Investors Service

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Credit strengths

» HSH will benefit from strong capitalisation and still-sizeable additional loss-absorption buffers following its privatisation.

» HSH maintains substantial liquidity buffers as a fallback position, in case its transition towards becoming a smaller, less-supportedprivate-sector bank disrupts its market access in 2018.

» The bank's asset portfolio will be substantially de-risked and complexity from the guarantee structure will be removed.

Credit challenges

» HSH's current funding profile requires a material transformation and maturity extension.

» Asset-risk concentrations remain high as the bank places a strong focus on commercial real estate (CRE) lending and remainsexposed to shipping loans, although the portfolio is reducing.

» The significant transformation of the bank limits the predictability of its ability to achieve future profit targets.

Outlook

» We have placed HSH's ratings on review for upgrade.

» We will focus on the bank’s progress towards passing the regulatory and owner’s approvals for the ownership change to takeeffect later this year. These milestones comprise the closing of the European Commission’s state aid case against HSH, andapproval by the European Central Bank and other regulatory bodies, as well as local parliamentary endorsement of the sale by theGerman states of Hamburg and Schleswig-Holstein. During the rating review period, we will focus particularly on monitoring thedevelopment of the bank’s financial profile and liability structure.

Factors that could lead to an upgrade

» As indicated by the rating review for upgrade, we expect to upgrade, by one notch, HSH’s Baa3 long-term deposit and senior seniorunsecured ratings, and the Baa3(cr) CR Assessment once all remaining hurdles to the closing of the entity’s signed ownershipchange are cleared, and our assumptions in relation to the expected stronger credit profile of the bank are met. The former iscontingent upon the required regulatory and parliamentary approvals for the sale.

» We may also upgrade HSH’s Baa3 long-term senior unsecured debt ratings if the transaction results in an unchanged extremely lowloss given failure result for the senior unsecured liability class under our Advanced LGF analysis.

» The magnitude of these rating changes may be more (or less) pronounced should the bank’s standalone financial profile evolvesignificantly better (or worse) than planned by HSH, or if the outcome of the bank’s Advanced LGF analysis is more (or less)beneficial for individual debt classes than we currently expect.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 16 March 2018 HSH Nordbank AG: Update following initiation of a review for upgrade

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Factors that could lead to a downgrade

» While currently unlikely, as indicated by the rating review for upgrade, a pronounced negative deviation of HSH’s future financialperformance from the solvency and liquidity metrics or liability structure we expect could result in a downgrade of the bank’sratings.

» Downside risks may arise from a material adverse scenario for ship lending or HSH's inability to execute its transition plan for itsfunding profile.

» In the event that HSH’s sale does not materialise, we would reassess the bank’s financial profile and rating components with afocus on the bank’s, its owners' and S-Group’s ability to swiftly adopt alternative steps that comply with the requirements of theEuropean Commission’s road map for the bank’s future development.

Key indicators

Exhibit 2

HSH Nordbank AG (Consolidated Financials) [1]9-172 12-162 12-152 12-142 12-133 CAGR/Avg.4

Total Assets (EUR billion) 76 81 93 105 105 -8.05

Total Assets (USD billion) 90 86 101 127 144 -11.75

Tangible Common Equity (EUR billion) 4.7 4.5 4.5 3.7 3.6 7.35

Tangible Common Equity (USD billion) 5.6 4.7 4.8 4.5 5.0 3.05

Problem Loans / Gross Loans (%) - 22.5 26.4 22.8 23.1 23.76

Tangible Common Equity / Risk Weighted Assets (%) 19.8 15.7 11.9 9.5 10.2 14.27

Problem Loans / (Tangible Common Equity + Loan Loss Reserve) (%) - 352.3 295.7 264.7 223.6 284.16

Net Interest Margin (%) 0.6 0.7 1.0 0.5 0.8 0.76

PPI / Average RWA (%) 1.1 0.2 0.5 -0.5 1.0 0.37

Net Income / Tangible Assets (%) -0.1 0.1 0.2 0.3 -0.6 -0.06

Cost / Income Ratio (%) 71.1 93.3 85.2 118.7 71.4 87.96

Market Funds / Tangible Banking Assets (%) 35.8 36.1 39.8 45.7 48.6 41.26

Liquid Banking Assets / Tangible Banking Assets (%) - 25.4 25.3 25.1 23.5 23.86

Gross Loans / Due to Customers (%) 109.5 130.2 138.3 156.0 168.4 140.56

[1] All figures and ratios are adjusted using Moody's standard adjustments. [2] Basel III - fully-loaded or transitional phase-in; IFRS. [3] Basel II; IFRS. [4] May include rounding differencesdue to scale of reported amounts. [5] Compound Annual Growth Rate (%) based on time period presented for the latest accounting regime. [6] Simple average of periods presented for thelatest accounting regime. [7] Simple average of Basel III periods presented.Source: Moody's Financial Metrics

ProfileBased in northern Germany, HSH Nordbank AG (HSH) is a regional commercial bank offering financial services to medium-sizedcompanies and high-net-worth private clients, and acts as the central institution to the regional savings banks. Following the ownershipchange, HSH's business profile will be more focused on CRE lending, as well as on renewable energy and infrastructure, and less so onship lending.

HSH was in financial distress twice over the last decade. The first time, in 2009, the bank's public-sector owners, the federal state ofSchleswig-Holstein and the city state of Hamburg, provided support in the form of a €10 billion second-loss asset guarantee. In 2013,repeated distress was remediated by the full reinstatement of this guarantee, which HSH had prematurely reduced. Ever since, HSH hasbeen in a mode of balance-sheet repair and consolidation, partly because it had to comply with various targets and measures that theEuropean Commission set as a condition for having received state aid.

HSH met its mandatory privatisation deadline that expired on 28 February 2018, with the announcement of its sale to a group ofequity investors led by Cerberus Capital Management L.P. (Cerberus) and J.C. Flowers & Co (J.C. Flowers).

3 16 March 2018 HSH Nordbank AG: Update following initiation of a review for upgrade

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Detailed credit considerationsSuccessful privatisation will lead to a significant improvement in capital adequacyWe expect HSH to maintain substantial core capital buffers over the medium term upon the closing of the announced ownershipchange, which will lead us to assign a Capital score multiple notches above the current ba2 level. The future capital ratios of HSH willbe far easier to compare with those of its peers because the bank's announced early settlement of its €10 billion owner guarantee willremove the distortive effects of that mechanism.

HSH pre-announced on 28 February it expects its regulatory Common Equity Tier 1 (CET1) capital ratio to be around 15% followingthe transactions associated with the sale. The decline from the bank's 19.2% CET1 ratio as of 30 September 2017 primarily reflects theeffect of the carveout of a legacy portfolio that will result in a mid-triple-digit million euro accounting loss for 2017, according to HSH.The bank aims to maintain this 15% CET1 level over at least the next five years. This compares favourably with the bank's individualcapital requirement for 2017, set at 10.5%, as defined in the supervisory review and evaluation process (SREP). The capital requirementof 10.5%, on a transitional basis, consists of an 8.9% SREP minimum requirement (Pillar 2 requirement) plus a 1.6% buffer (Pillar 2guidance).

According to the bank, the announced annual IFRS loss after privatisation effects for 2017 will translate into a much higher loss underHSH's 2017 unconsolidated local GAAP accounts, which will lead to a further write-down of the bank's hybrid bonds that currentlyhave a carrying value of 52.4%. Furthermore, HSH warned that its upcoming multiyear business transformation will delay the earliestpossible date of coupon resumption on its non-cumulative hybrid instruments to 2024 (for its 2023 results).

Far-reaching transformation of HSH's funding profile is a challenge, but substantial liquidity buffers and IPS transitionarrangement grant time to executeHSH's exit from S-Group as a result of the privatisation will continue to constrain the bank's wholesale funding access. The bank plansto offset lower future issuance and institutional deposit volumes by growing its retail deposit franchise, but also benefits from the cashinflow from the early guarantee settlement and overall reduced funding needs for its smaller balance sheet. HSH will benefit froma three-year transition period after closing of the sale in which IPS protection still applies and the bank holds a liquidity buffer thatensures it has sufficient time to execute the funding transition plan. The bank's degree of success in doing so will inform our futurepositioning of the current b1 Funding score.

Following its sale, HSH will have to prepare for its eventual exit from S-Group's cross-sector support scheme and carefully manage itsliquidity buffers and funding needs. Germany's savings banks will probably abstain from investing in HSH's unsecured debt issuances,implying that a traditionally important source of funds will dry up. In this context, HSH's entry into the private-sector depositprotection scheme, a discretionary scheme offering compensation for depositor losses for amounts above €100,000, will be key tomaintaining access to market funds beyond retail deposits.

HSH had a €7.5 billion cash reserve in addition to the €9.9 billion in securities eligible for repo transactions with central banks asof September 2017, which in total were equivalent to 23% of its balance sheet. These ample reserves and the liquidity inflow fromongoing asset sales will materially offset the bank's funding risk over the next four quarters, which is reflected in its baa3 LiquidResources score.

HSH pre-announced a strong 177% liquidity coverage ratio and a sound 116% net stable funding ratio as of December 2017, illustratingits ample liquidity buffers. The challenge in 2018 will be for the bank to strike a balance between maintaining costly liquidity reservesuntil a first-time issuance provides proof of HSH's continued access to unsecured funds and reducing liquidity buffers for the sake ofsavings-related costs.

Asset-risk concentrations remain high after the substantial de-risking through an asset carveoutFollowing the transfer of legacy assets, HSH will focus on the business areas it has been concentrating its underwriting on recently,primarily domestic CRE and corporate lending. We expect this shift away from problem loans and the associated reduction in itsshipping exposures to be reflected in an improvement in the assigned Asset Risk score from b3 now. The new assigned score will thenbe more reflective of HSH's improved asset quality, which will be largely in line with the strongly performing German loan portfolios ofthe bank's German peers. At the same time, the bank's CRE concentration and its remaining shipping assets leave it exposed to cyclical

4 16 March 2018 HSH Nordbank AG: Update following initiation of a review for upgrade

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exposures that, in the case of its CRE and corporate loan book, have a relatively short track record of performance in a benign economicenvironment.

HSH says its nonperforming exposures will account for less than 2% of its total exposures after the asset carveout. In 2017, the bankunderwrote €8.6 billion of new exposures, after €8.9 billion in 2016, compared with medium-term projected total assets of around €55billion.

HSH's asset carveout follows a series of risk-reduction measures that were based on direct asset transfers to its owners, as well as on anaccelerated workout of problem exposures. Like in earlier instances, the asset carveout will relieve the bank of all risks associated withthe claims because the newly formed special-purpose vehicle set up under the leadership of Cerberus and J.C. Flowers will be free fromrecourse to HSH.

After the removal of complexity, HSH can focus on establishing a track record of improving profitabilityFollowing the announced final clean-up of its balance sheet, HSH can be structurally profitable to the extent that its recurringrevenue covers its total costs. The clean-up will enable the bank to achieve a major cost relief, considering savings in the areasof risk charges, guarantee fees and the considerable staff costs required for the workout of the nonperforming book. In our view,efficiency improvements will be paramount for the bank to effectively compete for new lending opportunities while operating with(initially) higher funding costs. We further believe that the bank's new ownership structure will give HSH access to additional processoptimisation skills that will help it reposition its cost base.

For 2017, HSH pre-announced a net income of around €290 million before privatisation costs, supported by a decline in operating costsby more than €100 million from a year earlier to €507 million in 2017 and by a one-off realisation of hidden reserves. The privatisation-related one-off costs will turn this into a significant loss under HSH's consolidated IFRS accounts in the mid-triple-digit million eurorange. HSH pointed out that this loss will even be significantly exceeded to the downside by local GAAP unconsolidated results.

Support and structural considerationsAffiliate supportHSH benefits from cross-sector support from S-Group, reducing the probability of default because such support would be available tostabilise a distressed member bank and not just compensate for losses in resolution.

We consider the readiness of the sector to support its members high, which results in two notches of rating uplift to HSH's debt anddeposit ratings from the b3 BCA.

When completing the rating review, we expect to reduce, up to full elimination, the affiliate support notching for HSH's Adjusted BCA,based on the expected eventual exit of the bank from S-Group and its institutional protection scheme.

Loss Given Failure (LGF) analysisHSH is subject to the EU Bank Recovery and Resolution Directive (BRDD), which we consider an operational resolution regime. We,therefore, apply our Advanced LGF analysis, where we consider the risks faced by the different debt and deposit classes across theliability structure should the bank enter resolution. We assume residual tangible common equity of 3%, losses post-failure of 8% oftangible banking assets, a 25% run-off in junior wholesale deposits and a 5% run-off in preferred deposits. These ratios are in line withour standard assumptions.

In line with the new German insolvency legislation, which effectively subordinated senior unsecured bonds and notes to deposits andsenior senior unsecured debt in resolution since January 2017, we base our calculation on the assumption that deposits are preferred toplain vanilla senior unsecured bonds.

» For deposits and senior senior unsecured debt, rated Baa3 (including one notch of government support), our LGF analysis indicatesan extremely low loss given failure, leading to a three-notch uplift above the b1 Adjusted BCA.

» For senior unsecured debt, rated Baa3 (including one notch of government support), our LGF analysis also indicates an extremelylow loss given failure, leading to a three-notch uplift above the b1 Adjusted BCA.

5 16 March 2018 HSH Nordbank AG: Update following initiation of a review for upgrade

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» For HSH's senior subordinated programme, rated (P)B2, our LGF analysis indicates a high loss given failure, leading us to position itsrating one notch below the b1 Adjusted BCA.

» Trust-preferred securities and silent participations (Stille Einlagen) are rated Ca(hyb) and are under review for downgrade. Theseratings relate to the entities HSH N Funding I, HSH N Funding II, RESPARCS Funding Limited Partnership I and RESPARCS FundingII Limited Partnership, and are based on our expected loss calculation. The Ca(hyb) ratings reflect (1) principal write-downs tocurrently 52.4% of the nominal amounts; and (2) the requirement for HSH to abstain from servicing its hybrid instruments untilthe bank is privatised. HSH announced on 28 February that it expects an additional write-down of these instruments based on lossparticipation in its 2017 local GAAP results and that a resumption of coupon payments would not occur before 2024 for fiscal year2023.

Government support considerationsFollowing the introduction of the BRRD, we have lowered our expectations about the degree of support the government might provideto a bank in Germany in the event of need. Owing to its size on a consolidated basis, we consider S-Group as systemically relevantand, therefore, attribute a moderate probability of German government support for all members of the sector, in line with supportassumptions for other systemically relevant banking groups in Europe. We, therefore, still include one notch of government supportuplift in the debt and deposit ratings of S-Group member banks that are incorporated in Germany, including HSH. For junior securities,we continue to believe that the likelihood for government support is low and these ratings do not include any related uplift.

The envisaged decline in support factors of HSH's ratings upon completion of the rating review will likely result in a removal of theremaining notch of government support, as highlighted in our 28 February rating action.

Commercial paper and short-term issuer ratingsOur commercial paper and short-term issuer ratings only speak to instruments originally issued for short-term funding purposesand not to bonds originally issued for medium- and long-term funding purposes that are close to maturity. In Germany, instrumentsissued with the original intent of fulfilling the bank's short-term funding needs through the money markets effectively benefit from aninsolvency rank that stands pari passu to deposits and senior senior unsecured debt. Hence, our P-3 commercial paper and short-termissuer ratings for HSH and its branches are derived from the long-term senior senior unsecured debt ratings and not from the long-termsenior unsecured debt ratings.

Counterparty Risk (CR) AssessmentA CR Assessment is an opinion of how counterparty obligations are likely to be treated if a bank fails and are distinct from debt anddeposit ratings in that they (1) consider only the risk of default rather than both the likelihood of default and the expected financialloss, and (2) apply to counterparty obligations and contractual commitments rather than debt or deposit instruments. The CRAssessment is an opinion of the counterparty risk related to a bank's covered bonds, contractual performance obligations (servicing),derivatives (for example, swaps), letters of credit, guarantees and liquidity facilities.

HSH's CR Assessment is positioned at Baa3(cr)/P-3(cr)The bank's CR Assessment is positioned four notches above its b1 Adjusted BCA (including one notch of government support), ofwhich three are based on the buffer against default provided by more subordinated instruments to the senior obligations representedby the CR Assessment. To determine the CR Assessment, we focus purely on subordination, taking no account of the volume of theinstrument class.

About Moody's Bank ScorecardOur scorecard is designed to capture, express and explain in summary form our Rating Committee's judgement. When read inconjunction with our research, a fulsome presentation of our judgement is expressed. As a result, the output of our scorecardmay materially differ from that suggested by raw data alone (though it has been calibrated to avoid the frequent need for strongdivergence). The scorecard output and the individual scores are discussed in rating committees and may be adjusted up or down toreflect conditions specific to each rated entity.

6 16 March 2018 HSH Nordbank AG: Update following initiation of a review for upgrade

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Rating methodology and scorecard factors

Exhibit 3

HSH Nordbank AGMacro FactorsWeighted Macro Profile Strong + 100%

Factor HistoricRatio

MacroAdjusted

Score

CreditTrend

Assigned Score Key driver #1 Key driver #2

SolvencyAsset RiskProblem Loans / Gross Loans 23.4% caa1 ← → b3 Collateral and

provisioning coverageSector concentration

CapitalTCE / RWA 18.4% aa2 ↓ ↓ ba2 Capital fungibility Access to capital

ProfitabilityNet Income / Tangible Assets -0.1% caa1 ↑ caa1 Expected trend

Combined Solvency Score ba2 b2LiquidityFunding StructureMarket Funds / Tangible Banking Assets 36.1% ba2 ← → b1 Market

funding qualityLiquid ResourcesLiquid Banking Assets / Tangible Banking Assets 25.4% a3 ← → baa3 Asset encumbrance

Combined Liquidity Score baa3 ba2Financial Profile b1

Business Diversification -1Opacity and Complexity -1Corporate Behavior 0

Total Qualitative Adjustments -2Sovereign or Affiliate constraint: AaaScorecard Calculated BCA range b2-caa1Assigned BCA b3Affiliate Support notching 2Adjusted BCA b1

Balance Sheet is not applicable.

De Jure waterfall De Facto waterfall NotchingDebt classInstrumentvolume +

subordination

Sub-ordination

Instrumentvolume +

subordination

Sub-ordination

De Jure De FactoLGF

NotchingGuidance

vs.Adjusted

BCA

AssignedLGF

notching

Additionalnotching

PreliminaryRating

Assessment

Counterparty Risk Assessment -- -- -- -- -- -- -- 3 0 ba1 (cr)Senior senior unsecured bank debt -- -- -- -- -- -- -- 3 0 ba1Deposits -- -- -- -- -- -- -- 3 0 ba1Senior unsecured bank debt -- -- -- -- -- -- -- 3 0 ba1Dated subordinated bank debt -- -- -- -- -- -- -- -1 0 b2

Instrument class Loss GivenFailure notching

AdditionalNotching

Preliminary RatingAssessment

GovernmentSupport notching

Local CurrencyRating

ForeignCurrency

RatingCounterparty Risk Assessment 3 0 ba1 (cr) 1 Baa3 (cr) --Senior senior unsecured bank debt 3 0 ba1 1 Baa3 Baa3Deposits 3 0 ba1 1 Baa3 Baa3Senior unsecured bank debt 3 0 ba1 1 Baa3 Baa3Dated subordinated bank debt -1 0 b2 0 (P)B2 --Source: Moody's Financial Metrics

7 16 March 2018 HSH Nordbank AG: Update following initiation of a review for upgrade

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Ratings

Exhibit 4Category Moody's RatingHSH NORDBANK AG

Outlook Rating(s) Under ReviewBank Deposits Baa3/P-31

Baseline Credit Assessment b32

Adjusted Baseline Credit Assessment b12

Counterparty Risk Assessment Baa3(cr)/P-3(cr)1

Issuer Rating Baa32

Senior Unsecured Baa32

Subordinate MTN -Dom Curr (P)B22

ST Issuer Rating P-32

Other Short Term -Dom Curr (P)P-32

HSH N FUNDING I

Outlook Rating(s) Under ReviewBACKED Pref. Stock Non-cumulative Ca (hyb)3

HSH N FUNDING II

Outlook Rating(s) Under ReviewJr Subordinate Ca (hyb)3

[1] Rating(s) within this class was/were placed on review on 28 February 2018. [2] Placed under review for possible upgrade on 28 February 2018. [3] Placed under review for possibledowngrade on 28 February 2018.Source: Moody's Investors Service

8 16 March 2018 HSH Nordbank AG: Update following initiation of a review for upgrade

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Endnotes1 The rating for Sparkassen-Finanzgruppe is the corporate family rating and outlook, and the BCA.

9 16 March 2018 HSH Nordbank AG: Update following initiation of a review for upgrade

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

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Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (includingcorporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating,agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintainpolicies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO andrated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually atwww.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s InvestorsService Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intendedto be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, yourepresent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly orindirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion asto the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be recklessand inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or otherprofessional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’sOverseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a NationallyRecognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by anentity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registeredwith the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferredstock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it feesranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

REPORT NUMBER 1113666

10 16 March 2018 HSH Nordbank AG: Update following initiation of a review for upgrade

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Contributors

Mark C JenkinsonAssociate Analyst

CLIENT SERVICES

Americas 1-212-553-1653

Asia Pacific 852-3551-3077

Japan 81-3-5408-4100

EMEA 44-20-7772-5454

11 16 March 2018 HSH Nordbank AG: Update following initiation of a review for upgrade