Kamakura Reports Corporate Credit Quality Remains Strong in January

Tower Automotive Default Probabilities Reach 61% Prior to Bankruptcy

HONOLULU, February 3, 2005: Kamakura Corporation reported today that its monthly index of troubled companies in the United States remained strong in January, rising slightly to 12.9% of the public company universe. The Kamakura troubled company index was at its second lowest level since last July, up from 12.0% of the public company universe in December. Kamakura classifies any company with a default probability of more than one percent as troubled. Kamakura also reported that its Jarrow-Chava default probabilities for Tower Automotive Inc., which filed for bankruptcy on February 2, were at 61% on February 1.

"The Kamakura troubled company index remains at levels consistent with the best part of the credit cycle," commented Dr. Donald R. van Deventer, Kamakura Chairman and Chief Executive Officer. "Even with the slight rise this month, the troubled company index remains near its cyclical lows. The number of companies with default probabilities between 1% and 5% was 7.9% of the public company universe, up from 7.0% in December. Companies with default probabilities between 5 and 10% were 1.9% of the universe compared to 1.6% in December. Companies with default probabilities between 10% and 20% were essentially unchanged at 1.3% of the universe. The riskiest firms in the universe, those with default probabilities over 20%, decreased to 1.8% from 2.3% of the universe in December. Tower's bankruptcy filing on February 2 shows that current credit quality problems are concentrated in a small number of companies while the corporate world in general enjoys the benefits of the economic recovery."

Kamakura is offering free trials of its KRIS default probability service to qualified institutions. For more information on Kamakura's free trial offer please contact Kamakura at info@kamakuraco.com . More information can also be found on the Kamakura Corporation web site and in Advanced Financial Risk Management (John Wiley & Sons, 2004) by Kamakura's van Deventer, Kenji Imai, and Mark Mesler. Advanced Financial Risk Management was recently named "best finance book of 2004" on riskbook.com.

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