Moody's hosts annual conference on Middle Eastern Credit Risk, Ratings and Debt Finance

Moody's Corporation Chairman and CEO Raymond W. McDaniel, Jr. addressed the conference, discussing Moody's service capabilities to the Middle Eastern capital markets, highlighting the important role Moody's Middle East Limited will play as participants in these markets increasingly access the global capital markets to address their financing requirements.

Moody's analysts gave presentations on a variety of topics and sectors related to Middle Eastern and Islamic finance.

Key highlights included:
• Middle Eastern securitization will launch with at least $1-2 billion of issuance in 2007
• During 2006, approximately $34 billion in Gulf Cooperation Council (GCC) project finance debt was raised, representing 22% of total project
finance debt raised globally
• Moody's estimates current GCC project finance loan exposure of commercial banks as at December 31, 2006 is approximately $60-70 billion
• Moody's estimates current GCC project finance loan exposure of export credit agencies/other government bodies as at December 31, 2006 is approximately $10-15 billion
• Moody's estimates current aggregate GCC project bond exposure as at December 31, 2006 is approximately $6 billion
• While Middle Eastern banks have strong financial performances, Moody's is looking for these banks to further improve corporate governance and risk management as well as increase diversification in order to improve resilience
• The GCC corporate bond market will at least double in volume from last year's $18.2 billion of issuance
• 83% of corporate bond issuance in the GCC region originates in the UAE, however greater diversification is expected
• Takaful growth rates exceed those of conventional insurance, with global premiums expected to grow to $10 billion by 2010 (20% CAGR) from $4 billion in 2005

"Feedback from conference participants revealed there was increasing focus on debt and sukuk issuance and that Moody's ratings were increasingly sought to help understand and objectively benchmark the risk of such securities for investors," remarked Frederic Drevon, Head of Moody's Europe, Middle East & Africa. "We believe debt markets will be critical to the future of Middle Eastern capital markets. During 2007, Moody's expects to see a dramatic increase in the number of credit ratings assigned as regional companies look to establish international credibility and financing."