J.P. Morgan Securities, LLC -- Moody's Assigns A1 Senior Rating to JP Morgan Securities LLC

RATINGS RATIONALE

The A1 rating reflects Moody's view of JPMS LLC as an essential legal entity for JP Morgan's investment banking franchise. Along with the lead bank, JP Morgan Chase Bank NA, it is a core legal entity providing capital markets services in the North American market and facilitates access to the US capital markets for offshore clients of the bank. JPMS LLC also holds important regulatory licenses. The firm is a registered broker-dealer and futures commission merchant and plans to become a registered swap dealer consistent with the requirements of US Dodd-Frank legislation. Through a subsidiary, JPMS LLC also provides securities and futures clearing, customer financing and securities lending.

The balance sheet of JPMS LLC displays characteristics that are similar to other registered U.S. broker-dealers. Gross balance sheet leverage is high, but this is mitigated by a high-quality repo book and low levels of less liquid inventory. At September 30, 2012JPMS LLC had $19.7 billion in equity and subordinated debt qualifying as SEC regulatory capital and $11.6 billion of regulatory net capital.

When considering the intrinsic financial strength of JPMS LLC, Moody's views the firm as closely integrated to the broader JP Morgan group -- managerially, operationally and financially. A significant percentage of the firm's revenues and expenses represent allocations from other JP Morgan entities. JPMS LLC also uses other JP Morgan entities to hedge risk. If the JP Morgan group is not in distress, Moody's believes that JP Morgan would be virtually certain to provide support to JPMS LLC. Accordingly, Moody's views the creditworthiness of JPMS LLC, inclusive of support from the group, to be equal to the a3 standalone baseline credit assessment of JP Morgan Chase Bank NA.

In the circumstance where JP Morgan requires external support from US authorities, Moody's believes that the domestic US banking subsidiaries would be the primary intended beneficiaries of that support. Efforts to minimize the scale of government support might restrict the flow of support to JPMS LLC. However, Moody's also recognizes the close operational ties between JPMS LLC and JPMorgan Chase Bank NA and the challenges that would be posed to a resolution of the bank if JPMS LLC did not also receive support. This results in two notches of uplift from the standalone credit assessment , reflecting the likely benefit of government support to JPMS LLC, resulting in a long term issuer rating of A1, as compared to three notches of uplift for JP Morgan Chase Bank NA (rated Aa3 for deposits).

JP Morgan Securities LLC is a registered broker-dealer subsidiary of JP Morgan Chase and Company.

The principal methodology used in this rating was Global Securities Industry Methodology published in December 2006. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

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The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

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Peter E Nerby Senior Vice President Financial Institutions Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Robert Franklyn Young MD - Financial Institutions Financial Institutions Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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