S&P: Effect on Resona Bank RMBS of Govt Fund Infusion.

Business Editors

TOKYO--(BUSINESS WIRE)--May 29, 2003

Standard & Poor's--Standard & Poor's Ratings Services today announced an update of its current views regarding the possible effect on the three securitization transactions backed by residential mortgages originated by Resona Bank Ltd. of the activation of certain transaction trigger events relating to the Bank of Japan Law Article 38. This follows the formal notification of the occurrence of a transaction trigger event by the Japanese trustee to the bond trustee.

On May 17, 2003, the Japanese government announced its decision to inject public funds into the bank, pursuant to an application for such assistance under the Bank of Japan Law Article 38.

Over the past three years, Standard & Poor's has assigned ratings to three residential mortgage-backed securities transactions originated by the former Daiwa Bank Ltd., which merged with Asahi Bank Ltd. to form Resona in March 2003. The three transactions, Maison Capital Corp., Trust Maison Special Purpose Co., and Trust Maison Two Special Purpose Co., have a total outstanding debt of about JPY87.8 billion. These deals all carry the same trigger event clause, which states that a request by the government for financial support to be provided to Resona under the Bank of Japan Law Article 38 will trigger obligor perfection, acceleration of payments, and replacement of the trustee/servicer. Since the government has already made such an Article 38 request, the Japanese trustee has officially notified the bond trustee that a transaction trigger event has occurred. Standard & Poor's, the trustees, arrangers and related parties are now discussing the procedure necessary for activating the transaction trigger.

Resona's transactions incorporate trigger events as protection measures, which are based on the assumption that a weakening in Resona's credit quality could lead to an increase in set-off risk and commingling risk, a deterioration in the trustee's and servicer's ability to perform their duties, and a decline in the performance of the securitized receivables.

Activation of the trigger will result in obligor perfection, accelerated amortization, replacement of the trustee/servicer as stipulated by the original contract agreements for these transactions. This is done to prevent the performance of the obligor pools being seriously affected should Resona effectively cease operating for certain reasons, such as bankruptcy. In general, the following procedures are taken following the activation of the trigger.

-- Obligor perfection. In order to maintain the cash waterfall

from the securitized pool, the obligors' set-off claims

against the originator (which arise when obligors set off the

amount due to the originator under their loan agreements

against the balance of their deposits held with the same

party) will be sized, and the obligors will also be ordered to

stop making loan payments to the originator if the latter is

insolvent.

-- Accelerated payment. Distributions to the subordinated

beneficial interests will be suspended to ensure principal and

interest payments on the senior beneficial interests.

-- Replacement of trustee/servicer. The incumbent

trustee/servicer will be replaced, if they become insolvent or

face major obstacles in conducting their duties, in order to

maintain the level of trust administration and servicing for

the transactions.

Standard & Poor's will continue to consult with the relevant parties and closely monitor these transactions to assess how the trigger event issues are resolved. With regard to improvements in Resona's financial base, please refer to Standard & Poor's news release entitled "Resona Bank's 'BB+/B' Ratings on Watch Positive Following Capital Infusion Decision" disseminated on May 19.

Copyright (c) 2003, Standard & Poor's Ratings Services