Delta Loan Note Nominee Limited will wholly own Alpha Topco, which in turn is the holding company of a group of companies that hold the rights to commercially exploit the FIA Formula One (F1) World Championship. FIA is the governing body for world motor sport. Delta Loan Note Nominee Limited is raising USD 1 billion through the issuance of new private high yield debt (not rated by Moody's). While the new high yield debt is structurally subordinated to the rated bank debt at Delta 2, it is guaranteed on a subordinated basis by the same guarantors that guarantee the bank debt and its cash interest payments will be serviced (subject to the bank loan's senior facility agreement and an intercreditor agreement) from cash flows generated by Formula One. Moody's has therefore moved its CFR to the Delta Loan Note Nominee Limited entity, and the new high yield debt is included in Moody's Loss Given Default (LGD) determination.

RATINGS RATIONALE

The B2 CFR of Delta Loan Note Nominee Limited is two notches below the Ba3 CFR that Moody's previously assigned to Alpha Topco. The differential reflects Delta Loan Note Nominee Limited's materially increased leverage as a result of the new high yield debt issuance, the proceeds of which will be used to fund a distribution to Formula One's shareholders and a more aggressive financial strategy implemented by the shareholders in the wake of the postponement of an IPO for Formula One, initially planned for mid-2012. The downgrade of Formula One's bank debt to B1 (from Ba3) is based on the group's lower CFR, but also considers that the bank debt ranks ahead of the new high yield notes in Moody's LGD assessment.

The planned distribution follows a decision earlier this year to distribute USD 1.1 billion to shareholders, which has largely been executed. It will bring the total distributions announced in 2012 to USD 2.2 billion. Pro forma for the second distribution, Moody's expects a Debt/EBITDA ratio (as defined by Moody's) for 2012 in excess of 6x, increasing further in 2013, before reducing gradually from 2014 onwards. The B2 CFR for Delta Loan Note Nominee Limited also considers the company's: (i) asset-light business model that relies heavily on the continuation of current contractual relationships; (ii) dependence on a relatively small number of revenue generating events; (iii) the need to innovate and adapt the franchise to keep and enhance its appeal to its fan base; (iv) exposure to key person risk regarding the pivotal role that Bernie Ecclestone - the group's CEO - has played in building and maintaining the F1 franchise; and (v) complex corporate structure.

More positively, the B2 CFR recognizes the strength of F1's position as one of the world's best-known sport franchises and leading motorsport event with a well-established tradition and large global fan base. The rating also acknowledges: (i) Formula One's consistent operational track record and solid financial performance over the last few years; (ii) a good level of revenue visibility from multi-year contracts with key commercial partners, including promoters and broadcasters; and (iii) the cash generative nature of the business with limited ongoing capital expenditure needs.

Given that Alpha Topco has not provided consolidated accounts and Delta Loan Note Nominee Limited will not do so in the future, Moody's relies in its analysis on the consolidated accounts of Delta Topco Limited (Delta Topco), currently the ultimate holding company for the Formula One business. Moody's adjusts Delta Topco's consolidated accounts for its stand-alone activities, which are essentially limited to its function as holding company for Alpha Topco and, in future, for Delta Loan Note Nominee Limited. Moody's has further assumed that Delta Topco's claim on Delta Loan Note Nominee Limited and its subsidiaries will remain limited to its ownership of Delta Loan Note Nominee Limited's common equity and that any additional future distributions to Delta Topco will be de minimis in the near term.

Moody's has further assumed that bilateral agreements with most of the racing teams (including all of the top teams) will be translated into a new Concorde agreement in short order. The current Concorde agreement, which governs the relationship between the holder of the commercial rights to exploit F1 and the racing teams, will expire at the end of 2012. Finally, Moody's notes that the group's CEO recently appeared in a personal capacity as a witness in a court case surrounding alleged bribery at the time when the CVC funds acquired the company. Following the conclusion of the case, there is now some press speculation that German prosecutors might bring action against Mr Ecclestone himself. Here, Moody's takes comfort from the fact that Delta Topco's board commissioned an internal investigation in 2011, which was conducted by external auditors (Ernst & Young) and legal advisors (Freshfields), and which concluded that neither Formula One, nor CVC, had any involvement in the alleged payment that was the focal point of the court case.

Following the company's aggressive distribution steps in 2012, the ratings are initially weakly positioned at the B2 level. Ratings could come under negative pressure, if: (i) leverage measured by Debt/EBITDA (as adjusted by Moody's) exceeds 7x; (ii) the company generates negative free cash flow; (iii) the Concorde Agreement is not renewed as currently envisaged; (iv) Moody's assumptions listed above prove to be incorrect; or (v) if there are signs that the company loses operating momentum on a sustained basis e.g. losses of major broadcasting contracts or material disruptions to the race schedule.

Moody's does not foresee any upward rating pressure in the near to medium term. Over time, ratings could come under upward pressure, if leverage falls visibly and sustainably so that a Debt/EBITDA ratio below 6x can be achieved, together with ongoing free cash flow generation and steady operational performance (revenue growth, margin maintenance).

Moody's views Delta Loan Note Nominee Limited liquidity as sufficient for its needs. The free cash flow generative nature of the business (as measured by Moody's -- after capex and dividends) together with an undrawn US$ 70 million revolving credit facility should cover the limited ongoing debt repayment requirements. Moody's notes that the revolver is subject to a set of typical financial maintenance covenants as customary for the rating level under which the agency would expect Formula One to maintain comfortable headroom.

Delta Loan Note Nominee Limited, a Jersey company, will become the holding company for the group of companies that exploit the commercial rights to the FIA F1 Championship. The company is indirectly owned by a group of private investors with voting control held by funds advised by CVC Capital Partners Limited.

Delta Loan Note Nominee Limited , Alpha Topco Limited and Delta 2 (Lux) S.a.r.l.'s ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Delta Loan Note Nominee Limited, Alpha Topco Limited and Delta 2 (Lux) S.a.r.l.'s core industry and believes Delta Loan Note Nominee Limited , Alpha Topco Limited and Delta 2 (Lux) S.a.r.l.'s ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The ratings have been disclosed to the rated entities or their designated agent(s) and issued with no amendment resulting from that disclosure.

Information sources used to prepare each of the ratings are the following: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entities, obligations or credits satisfactory for the purposes of issuing these ratings.

Moody's adopts all necessary measures so that the information it uses in assigning the ratings is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Alpha Topco Limited has received a Rating Assessment Service within the last two years preceding the Credit Rating Action.

Moody's Investors Service may have provided Ancillary or Other Permissible Service(s) to the rated entities or their related third parties within the two years preceding the credit rating action. Please see the special report "Ancillary or other permissible services provided to entities rated by MIS's EU credit rating agencies" on the ratings disclosure page on our website www.moodys.com for further information.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

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Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Christian Rauch Senior Vice President Corporate Finance Group Moody'sInvestors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Olivier Beroud MD - Corporate Finance Corporate Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Investors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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