Kamakura Reports Further Corporate Credit Quality Improvement in July

HONOLULU, August 1, 2005: Kamakura Corporation announced today that its monthly index of troubled companies in the United States dropped to 13.4% of the public company universe in July, the second monthly decline in a row. The index had been at 16.0% of the public company universe in both April and May. The Kamakura troubled company index remains well above the most recent low point of 11.1%, reached in April 2004. The index has been moving in a range between 11% and 16% since August 2003 after topping 30% at the height of the last recession. Kamakura classifies any company with a default probability of more than one percent as troubled.

"The Kamakura troubled company index remains at levels above its recent lows but the strong economy has kept the index from rising beyond its recent peak of 16%," said Warren Sherman, Kamakura President and Chief Operating Officer. "The number of companies with default probabilities between 1% and 5% improved to 7.9% of the universe in July from 8.4% in June and 9.6% in May. Companies with default probabilities between 5 and 10% were down to 1.9% of the universe from 2.1% a month earlier. Companies with default probabilities between 10% and 20% were up 0.1% to 1.6% of the universe. The riskiest firms in the universe, those with default probabilities over 20%, improved 0.2% to 2.1% of the universe in July."