New Market Makers on EuroCredit MTS; New Benchmark Securities Listed and Record Turnover Volumes

London, February 12, 2003 – Bayerische Landesbank and ING BHF Bank have joined EuroCredit MTS in the capacity of Market Maker, taking the number of participants on the System to twenty-four (24). Twenty-one (21) Market Makers as well as three dealers ("Market Takers") now participate on EuroCredit MTS.

Three new bonds meeting the EuroCredit MTS eligibility criteria were also listed during January, demonstrating the ongoing interest of issuers in developing benchmark issues that benefit from the transparency and price discovery offered by the EuroCredit MTS system. These bonds were comprised of one Pfandbrief and two Cédulas Hipotecarias: the Eurohypo 21/01/13 4.5%, Ahorro y Titulizacion’s 28/06/12 5.25% and Banco Bilbao Vizcaya Argentaria’s 26/09/074.25%. The Landesbank NRW 08/02/08 5.25% and an additional Cédula of BBVA, the 29/01/13 4.25%, are also expected to be included on the System shortly. EuroCredit MTS-listed bonds, each required to have €3 billion in outstanding size, a triple-A rating and the commitment of seven Market Makers, forms the benchmark segment for the wider covered bond market.

Liquidity on EuroCredit MTS continues its rapid and steady growth with over €16.57 billion traded during January 2003 (single-side counted), a 37% increase from the same period last year. Daily volumes now average €753 million, which are 10% higher than the best average daily volumes of €700 million in the last quarter of 2002.

Gianluca Garbi, Chief Executive Officer said: "The European covered bond market is following a trend leading towards larger, more liquid issues and this is helping to consolidate the central position of EuroCredit MTS as the benchmark platform for such bonds. The development of the market and the system is underlined by the increasing support of the dealer community which has materialized in greater volumes on EuroCredit MTS – volumes that yesterday set yet another daily record of more than €1.5 billion."

Doctor Karsten von Köller, President of the Association of German Mortgage Banks, said: "We at the Association of German Mortgage Banks are trying to correct the spread differences that have developed among various Pfandbriefe issuers due to the reasoning by certain rating agencies that the risk related to the issuing banks also applies directly to the Pfandbriefe themselves. While we are working to amend the mortgage-banking act in order to highlight the difference between the security of the Pfandbriefe and the credit profiles of the issuing mortgage banks, we are also pleased to see the ongoing development of EuroCredit MTS. The increasing membership and volumes of the System illustrates the internationalisation and benchmark status of the Pfandbriefe asset class."

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