Kamakura Reports Fourth Consecutive Corporate Credit Quality Improvement in September

HONOLULU, October 6, 2005: Kamakura Corporation reported today that its monthly index of troubled companies in the United States dropped again in September to 13.1% of the public company universe, the fourth monthly decline in a row. The index, which had been at 16.0% of the public company universe in both April and May, dropped from 13.3% in August. The Kamakura troubled company index reached its recent low point of 11.1% in April 2004. The index exceeded 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 has been moving in a narrow range for some months now, a range that is typical of an economy that is healthy but not exuberant," said Warren Sherman, Kamakura President and Chief Operating Officer. "The impact of higher oil prices is continuing to take its toll on companies heavily dependent on oil-related costs. In September, the number of companies with default probabilities between 1% and 5% decreased slightly to 7.9% of the universe from 8.0% in August. Companies with default probabilities between 5 and 10% also decreased slightly to 1.9% of the universe from 2.0% a month earlier. Companies with default probabilities between 10% and 20% jumped a bit, rising to 1.5% of the universe from 1.3% in August. The riskiest firms in the universe, those with default probabilities over 20%, improved 0.1% to 1.9% of the universe in September."

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