Fitch Rates Giro Balanced Funding Corp. $7.5B ABCP Program 'F1'.

NEW YORK -- Giro Balanced Funding Corporation's (GBFC) $7.5 billion partially supported, hybrid asset-backed commercial paper program (ABCP), sponsored by Bayerische Landesbank, New York branch (BayernLB), is rated 'F1' by Fitch Ratings. The rating is based on the credit quality of the various financial assets purchased by GBFC, the dynamic programwide credit enhancement available, liquidity support, and the structural features of the program. BayernLB is rated 'AAA/F1+' by Fitch.

GBFC is a bankruptcy-remote, special purpose Delaware corporation established to issue up to $7.5 billion of 4(2) U.S. commercial paper (U.S. CP) whose proceeds acquire various financial assets that meet the program's credit and investment policy. The program's U.S. CP may have maturities of no more than 270 days.

Giro Balanced Funding Limited (GBFL), a bankruptcy-remote Jersey, Channel Islands company, sponsored by BayernLB, purchases nondollar denominated assets but does not issue CP to fund such asset purchases. Rather, GBFL funds asset purchases through loans from GBFC.

Two layers of credit enhancement may be available to protect ABCP investors. The first layer of credit enhancement for eligible assets includes transaction or asset-specific enhancement, which has been sized according to a particular asset's credit rating. Credit enhancement may take the form of overcollateralization, subordination, monoline insurance guarantees, cash collateral accounts, reserve accounts, or excess spread, among other types. The second layer of credit enhancement, a BayernLB letter of credit, provides programwide support. The amount of this programwide facility is dynamic and fluctuates based on credit rating diversification, number of assets, size of the largest obligor, and tenor of the ABCP issued. The programwide credit enhancement floor will fluctuate between 1% and 4% of the face amount of outstanding ABCP with a floor of $50 million.

Liquidity support is provided by both internal and external sources. Internal support is derived from collections on the underlying asset portfolio. External liquidity support exists in the form of 102% transaction or asset-specific support and is provided by a syndicate of 'F1' or higher rated banks or financial institutions.

As administrator for GBFC and GBFL, BayernLB evaluates and structures all asset purchases, monitors asset performance to ensure compliance with the credit and investment policy, obtains funding under the liquidity or credit agreements, and administers the issuance, sale, and timely repayment of the ABCP.

For more information on German Landesbank ratings, including BayernLB, see the Fitch's research report 'Short-Term Ratings of Key Importance to German Landesbanks, Uplift Possible,' dated March 11, 2005, available on the Fitch Ratings web site at 'www.fitchratings.com'.