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Moody's KMV Launches Breakthrough Private Company Risk Assessment Tool to French Market

RiskCalc v.3.1 France provides banks and corporations access to superior credit risk measures specific to French small-to-medium enterprises

PARIS / SAN FRANCISCO, April 27, 2005 – Moody’s KMV, the world’s leading provider of quantitative credit-risk solutions to lenders, investors and corporations, today announced the availability in France of RiskCalc® Version 3.1, its private company credit risk modeling tool. The new version is the first and only on the market that offers a transparent analytic model combining forward-looking, equity market-based credit cycle factors with crucial, firm-specific details.

RiskCalc v.3.1 brings to France the only private company default risk model that combines firm-specific financial data from Moody’s KMV French Credit Research Database (CRD) with equity market based information derived from the Moody’s KMV public firm model. The result is a series of precise Expected Default Frequency (EDF) credit measures for French small-to-medium enterprises, based on the richest and cleanest data available.

Jeff Bohn, Managing Director and Head of Research, Moody’s KMV, says: "Following the successful roll-out of RiskCalc v.3.1 in the US, UK, Canada, Japan and Italy, we are excited to bring this unique private company default risk assessment tool to the French market, which exclusively offers forward-looking equity market based credit cycle adjustments. Moody’s KMV has extensive experience in providing country-specific databases, allowing us to offer the most accurate models on the market to our customers. By using these models, our clients benefit from reduced losses and improved performance."

Among its features, RiskCalc v.3.1 enables users to originate loans more efficiently (thousands of private companies may be assessed in minutes); model risk by country and sector; determine debt terms and pricing; identify early warning signals; quantify in a common framework true risks for internal and external discussion; and, concentrate limited analyst resources where most needed. RiskCalc can be used by financial institutions to rate risk, originate and price loans, allocate capital and monitor portfolios, all with greater efficiency. Corporations can use RiskCalc to rate risk and to assess the credit-worthiness of their customers and suppliers.

As a result of access to highly accurate default probabilities, customers are provided a common metric for communicating with regulators and characterizing loan portfolios for asset securitization. Customers access RiskCalc v.3.1 through a web interface and therefore benefit from a low cost of deployment and greater accessibility.

RiskCalc is currently being used throughout the world by more than 200 institutions with the RiskCalc v.3.1 models covering private firms in France, US, Canada, UK, Japan and Italy. Moody’s KMV RiskCalc is becoming a common language among those concerned with the mitigation of private company credit risk and is being well received as the secondary loans market develops, new levels of regulation are being introduced and bank shareholders are demanding better performance.

Moody’s KMV and Moody’s Investors Service will be presenting its tools and methodologies for measuring the credit worthiness of French private firms at an event in Paris on May 11th.