Fitch Initiates 'BBB' IDR on Investcorp Bank.

NEW YORK -- Fitch Ratings has assigned a 'BBB' long-term Issuer Default Rating (IDR) to Investcorp Bank BSC. Located and chartered in Bahrain, Investcorp Bank BSC is a holding company that conducts most of its operations via its subsidiary, Investcorp SA. At the same time, Fitch affirms the ratings of Investcorp SA and Investcorp Capital Ltd. The Ratings Outlook is Positive for both Investcorp Bank BSC and its subsidiary ratings. (See detailed list below.)

Fitch expects to rate preference shares to be issued by Investcorp Bank BSC 'BB+'.

Ratings of Investcorp BSC are directly linked to the ratings of Investcorp SA., a Luxembourg bank, which is an indirect subsidiary of Investcorp BSC. Investcorp BSC holds at least 95% (98% as at June 2005) of its assets through Investcorp ISA and its subsidiaries, consistent with its obligations under existing debt covenants. The ratings of both institutions reflect the strength of its Gulf-based franchise, diversified funding mix, good liquidity, and sufficient capitalization. Net income has been positively affected by the strength in the private equity markets in the past two years.

Fitch revised Investcorp SA's Outlook from Stable to Positive in November 2005 based on increasing revenues from stable fee-based business lines and improving diversification of funding sources. An upgrade may be warranted if asset management reaches projected growth rates.

Fitch assigns the following, with a Positive Outlook:

Investcorp Bank BSC

-- Long-term Issuer Default Rating (IDR) 'BBB';

-- Preferred 'BB+';

-- Short-term rating 'F2';

-- Individual 'B/C';

-- Support '5'.

Fitch affirms the following, with a Positive Outlook:

Investcorp SA

-- Long-term IDR 'BBB';

-- Short-term rating 'F2';

-- Individual 'B/C';

-- Support '5'.

Investcorp Capital Ltd.

-- Long-term IDR 'BBB';

-- Senior debt 'BBB';

-- Short-term rating 'F2';

-- Individual 'B/C';

-- Support '5'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria, and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance, and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.