Kamakura Reports Fifth Consecutive Month of Weakened Corporate Credit Quality

Kamakura Index of Troubled Companies Remains at Highest Level in 20 Months

HONOLULU, June 1, 2005: Kamakura Corporation reported today that its monthly index of troubled companies in the United States stayed at 16.0% of the public company universe in May, the fifth consecutive month with declining or steady corporate credit quality. The index remains at its highest level since September 2003. The Kamakura troubled company index remains up 2.4% above March 2005 levels. Kamakura classifies any company with a default probability of more than one percent as troubled.

"The Kamakura troubled company index remains 4.9% higher than the low point of 11.1% reached in April 2004," said Warren Sherman, Kamakura President and Chief Operating Officer. "The number of companies with default probabilities between 1% and 5% remained at 9.6% of the universe in May. Companies with default probabilities between 5 and 10% were 2.5% of the universe. Companies with default probabilities between 10% and 20% were unchanged at 1.7% of the universe. The riskiest firms in the universe, those with default probabilities over 20%, also remained at 2.2% of the universe in May."

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