Amsterdam, Friday, 17 August, 2007. Credit insurer Atradius is concerned that the crises in the U.S. sub-prime mortgage market, currently affecting all major financial markets, will impact the capability of companies to meet both debt obligations and obligations towards suppliers in the relatively short term.

"Most notably, some highly debt-leveraged companies have been taken over by private equity firms that are under observation," said Amsterdam-based Anno Kamphuis, Chief Risk Officer of Atradius N.V. "Several private equity sponsored companies are now more highly indebted than ever before. We believe this credit market slump marks the end of an era of ‘equity anorexia,’ the irrational financial leveraging of companies. Also, we are vigilant on private equity deals presently in the pipeline."

According to Atradius, the share of private equity transactions with a debt-to-operating profit multiple higher than 6 increased to over 36% until mid 2007. In 2002, this share accounted for only 4%. This illustrates the increase in debt capital in relation to operating results in some private equity deals.

"Like any negative market correction," said Kamphuis, "this one is very painful, particularly for financial institutions and investors. It will no doubt also spread to the corporate sector. Still, Atradius believes that a correction was unavoidable.

"It may be a good thing that this correction in the credit markets has happened now, with major European economies still showing reasonably good growth. This allows companies to generate adequate operational cash flows and mitigates the risk that companies will be unable to meet debt and trade payable obligations.

"We believe a pricing adjustment in corporate debt is required to re-establish a sound basis for the future. It makes it less attractive to load companies with unhealthy levels of debt. Certainly in an economic environment where operational cash generation becomes more uncertain and the price of corporate debt goes up, it will make companies and their shareholders think twice about the risk they take by increasing debt of companies to the hilt. Such adjustments in debt levels will be welcomed by Atradius in its business of giving corporations continued support in risk mitigation and business development."

About Atradius:

Atradius is a leading credit insurer with total sales of 1.3 billion euros and a market share of 24 percent on the worldwide credit insurance market. Every year the corporate group insures trade transactions valued at 400 billion euros against payment risks and provides products and services for risk transfer and receivables management. With 3,500 employees and more than 90 offices in 40 countries, Atradius has access to information on the credit ratings of 45 million companies throughout the world and makes over 12,000 credit limit decisions every day. Atradius has an "A" rating from Standard & Poor's (outlook stable) and an "A2" rating from Moody's (outlook stable).

For further information:

Atradius

Atradius Mexico
José Antonio González
Regional Marketing Communications Manager
Tel: +52 55 5484 0064
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Corporate Communications
Andrea Riedle
Tel.: +31 20 553 2052
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