LEADING INDEPENDENT OTC AND COMPLEX SECURITIES VALUATION PROVIDERS, STANDARD & POOR’S SECURITIES EVALUATIONS AND INDEPENDENT VALUATION AND RISK SERVICES LIMITED, AGREE TO OFFER EACH OTHER’S VALUATIONS

London - 29 January 2007

Agreement responds to growing concerns about the independence and opaque pricing of illiquid and complex instruments

Standard & Poor’s Securities Evaluations, Inc (SPSE), a leading global provider of independent securities evaluations, and Independent Valuation and Risk Services Limited (IVRS), a market leader in providing independent valuations of derivatives, illiquid securities and other hard-to-value and complex structures, today announced an agreement to offer each firm’s valuations to their clients.

This agreement initially enables SPSE to provide its full universe of valuations to IVRS and then subsequently IVRS’s valuations through SPSE. Each party will be able to offer the other’s valuations through their own services in a seamless and automated fashion, broadening the range of securities that both firms can cover.

With investor appetite for more complex OTC securities increasing there are concerns in the market over the validity of the prices being used for fund valuations. These include questions about independence and transparency which were recently highlighted by the UK’s Financial Services Authority in its Financial Risk Outlook 2006. “The rapid growth in the complex OTC market in recent years has not been matched by the development of a liquid secondary market, and this has raised concerns about the transparency, reliability and consistency of valuing many securities. SPSE’s pricing services provide an independent, rigorous and credible answer for daily valuation and mark-to-market problems,” commented Frank Cicotto, Senior Vice President, Standard & Poor’s Securities Evaluations. “We are very pleased to be adding a valuation service such as IVRS to our list of third-party vendors we make available to our clients. The increased global asset class coverage provided by this agreement further demonstrates that SPSE is committed to delivering flexible customer focussed solutions to assist the market with this increasingly important, but thinly traded area.”

IVRS is a subsidiary of Lombard Risk Management plc and has leveraged the Lombard Risk group’s extensive expertise in derivatives analytics and the credit derivatives markets, to structure a highly automated service for handling portfolios containing a range of OTC derivatives and illiquid securities; combined with a unique web-based reporting and analytics frameworks for clients to assess and analyse the valuation results and accompanying risk measures. IVRS has extended this service to the valuation of structured credit and other bespoke complex structures.

“We strongly believe that the institutional markets need service providers that can support their requirements for independent valuations and associated risk measures across a broad range of asset classes, with the capability to handle portfolios of securities including complex derivatives on a highly automated basis each day, combined with the financial and industry knowledge to understand and to add value to the valuations being produced,” says Christopher Rose, CEO of IVRS. “Our firm has developed carefully thought-out services to meet these demands, focusing on different types of securities and asset classes. The agreement with SPSE opens up tremendous opportunities to offer our clients valuations of asset classes covered by SPSE.”

Already a market leader in pricing hard-to-price securities, SPSE has provided independent multi-asset class evaluations for more than 35 years. With a complete global universe of 2.8 million bonds, including extended coverage of high yield bonds and complex structured products, including such illiquid securities as CDs, interest rate swaps, credit default swaps, CDOs, CLOs and European structured finance bonds, SPSE supports customers’ diverse pricing and evaluation needs. Building on the long-established expertise and market knowledge of the Lombard Risk group, IVRS has been providing model-based valuations services for over two years. IVRS was one of the earliest firms to provide quality valuation capabilities for credit derivatives.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development