Lombard Risk and Avendis Capital

London, 27th January 2005

Lombard Risk and Avendis Capital announce the successful completion of the first phase of their joint co-operation agreement

Lombard Risk Management plc, a leading provider of risk systems and independent valuation services, is pleased to announce with Avendis Capital the successful completion of Phase 1 of their joint development co-operation agreement.

Avendis Capital is a Geneva-based investment and asset management company specialising in alternative asset management.

The joint co-operation agreement is for the further development of Firmament, Lombard Risk’s latest software platform for trading and risk management, to broaden its product coverage to handle synthetic and static collateralised debt obligations (CDOs).

The product already provides coverage and analytics for credit default swaps, credit-linked notes, credit indices and bonds. In addition, it now provides full synthetic and static CDO and CDO² valuation capabilities as well as portfolio stress testing, and reporting on positions mark-to-market, credit spreads, recovery rates and time decay, and correlation, interest and FX rate sensitivities.

Avendis Capital have considerable expertise in this area which, coupled with Lombard Risk’s technical capabilities, has produced comprehensive CDO management capabilities within the Firmament product suite.

"We are delighted to have been able to benefit from the wealth of knowledge and information from such a cutting edge CDO practitioner as Avendis Capital" said John Wisbey, Chairman, CEO and founder of Lombard Risk, "it ensures that the Firmament CDO functionality will genuinely meet client needs."

"Avendis Capital are very excited about this partnership with Lombard Risk. We believe it offers a unique opportunity to combine their experience in the financial software industry with our expertise in the CDO and credit derivatives space to bring to the market an unrivalled trading and risk management system for correlation traders", said Eric De Sangues, Chief Investment Officer of Avendis Capital. "The synthetic CDO market has grown exponentially in the last 3 years with investors getting comfort from a dramatic increase in pricing and dealing transparency. We think this trend is a huge positive for all the players in that area and we expect the new Firmament CDO product to strengthen it."

Lombard Risk expects to officially launch the new CDO functionality in June 2005.

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