ISDA®
INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC

NEWS RELEASE

For Immediate Release Thursday, June 28, 2007

For More Information, Please Contact:

Louise Marshall, ISDA New York, 212-901-6014, lmarshall@isda.org

ISDA Meets to Discuss Proposed CDS on ABS Language

NEW YORK, Thursday, June 28, 2007 – The International Swaps and Derivatives Association (ISDA) today hosted a meeting to discuss issues initially raised by a member firm regarding the potential for market manipulation in new credit default instruments such as CDS on ABS and related index products. ISDA is mindful of and weighs carefully the concerns of all derivatives industry participants, particularly regarding the integrity of transactions conducted under the aegis of ISDA documentation. With this in mind, ISDA held the meeting open to investors and dealers, ISDA members and non-members.

Over 100 investors and dealers attended the meeting. The possibility that sellers could attempt to manipulate these products to their economic advantage was articulated, but the universal view was that firms are committed to the integrity of the market and that fraud and manipulation are unacceptable. Furthermore, other investors expressed the view that it would not be possible or fruitful to attempt to define by contract specific forms of fraud or manipulation. These are fact-specific determinations and existing legal prohibitions were specifically designed to deter a broad range of misconduct that constitutes fraud or manipulation. In addition, it was noted that further proposed restrictions in the documentation would artificially inhibit legitimate market activity, favoring the position of one side of the market at the expense of the other, and would therefore not be prudent.

The integrity of these new instruments depends on transparency and market participants' lawful conduct. Based on discussions at the meeting, the consensus view was that current ISDA documentation preserves existing legal protections against fraud and manipulation and in no way endorses or is permissive of illegal conduct. The ISDA documentation also preserves the balance between the rights of buyers and sellers of these products, as well as the rights of entities that service the underlying securities.

ISDA recognizes that successful markets depend on rules of engagement that are not only fair but are perceived to be fair and that engender the confidence of all market participants. To this end, ISDA has in previous years published a series of principles for the guidance of market participants in the conduct of their credit derivatives business. These principles set forth good practice and underscore the critical importance of market integrity to the industry, an approach that was echoed unanimously at the meeting. Based on discussions at the meeting, it was agreed that a similar statement of principles would be developed over the course of the coming months.

About ISDA

ISDA, which represents participants in the privately negotiated derivatives industry, is among the world’s largest global financial trade associations as measured by number of member firms. ISDA was chartered in 1985, and today has approximately 800 member institutions from 54 countries on six continents. These members include most of the world's major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the-counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association's web site: www.isda.org.

^®ISDA is a registered trademark of the International Swaps & Derivatives Association, Inc.