MOODY'S KMV HELPS BANKS IMPROVE RETURN ON RISK FOR PRIVATE GERMAN FIRMS

RiskCalc Germany plays key role in the success of German mezzanine CDO programs

SAN FRANCISCO, March 2, 2006 - Moody's KMV, the world's leading provider of quantitative credit risk measurement and management solutions to lenders, investors and corporations, today announced a new version of RiskCalcâ„¢ for the German market. RiskCalc Germany version 3.l will enable users to more effectively and efficiently measure changes in private firm credit risk.

Moody’s KMV RiskCalc v3.1 enables users to more accurately model risk by country and industry sector; determine credit terms and pricing; identify early warning signals; quantify in a common framework the true risks for internal and external discussion; and concentrate limited analyst resources where most needed. The measures can also be incorporated into valuation and portfolio models, improving the precision of credit risk management. Corporations, like financial institutions, use RiskCalc to rate and assess counterparty risk.

Using RiskCalc, credit risk professionals can better differentiate credit risks and thus allocate credit risk management resources appropriately. In addition, accurate default probabilities provide a common metric for communicating with regulators, investors and internal staff, enabling companies to prepare for Basel II compliance.

“RiskCalc offers a unique network of models covering more than 20 markets, facilitating credit risk measurement across multiple countries,” said Andrew Huddart, President of Moody’s KMV. “Our clients have given some very positive feedback on RiskCalc Germany, including high marks for the model’s transparency, precision and accuracy in evaluating private firm credit risk.”

With more than 30 German institutions relying on RiskCalc to assess private firms with revenue greater than EUR 500,000, it has quickly become the accepted benchmark for measuring credit risk. The first version of RiskCalc Germany was launched in 2001 and has seen strong demand from German financial institutions and corporations looking to better manage the credit risk of their middle market counterparties. RiskCalc Germany has played a key role in successful German mezzanine CDO programs such as preferred pooled shares (PREPS), equiNotes and Hybrid Equity Access Trust (HEAT).

"Moody's KMV RiskCalc plays a key role in the selection process for our transactions,” said Mr. Lars Schmidt-Ott, Managing Director of Capital Efficiency Group AG. “We believe that new features such as monthly updated Moody’s KMV EDF™ (Expected Default Frequency) credit measures will be a significant improvement, allowing for internal monitoring of middle-market companies."

Moody's KMV RiskCalc 3.1 utilizes the Moody's KMV Credit Research Database (CRDâ„¢), the world's largest and cleanest collection of data on private companies. Built in partnership with over 45 financial institutions around the world, the CRD contains 11 million financial statements on 2.2 million firms and over 170,000 private company defaults. The next generation of RiskCalc Germany is built on 200,000 financial statements from more than 43,000 private German firms.

New features and attributes included with RiskCalc Germany version 3.1 include:

Credit Cycle Adjustment or Financial Statement Only mode
More underlying data
1-year to 5-year cumulative, forward and annual Moody’s KMV EDF™ (Expected Default Frequency) credit measures
Relative sensitivities
Stress test graphs

Moody's KMV RiskCalc is comprised of a global network of more than 20 country-specific models, representing 80 percent of the world's GDP. In addition to over 200 clients worldwide, RiskCalc has been used as the basis for more than 150 collateralized loan obligations.

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