S&P Asgns Prelim Rtgs to KBC Bank N.V.'s European CDO.

Business Editors

LONDON--(BUSINESS WIRE)--Standard & Poor's

Oct. 8, 2001--Preliminary ratings were today assigned to the notes to be issued by special-purpose entity CYGNUS FINANCE 2001-1 PLC (see list below).

"CYGNUS is Belgium-based KBC Bank N.V.'s (A+/Stable/A-1) second European collateralized debt obligation (CDO)," said Katrien Van Acoleyen, associate director at Standard & Poor's Structured Finance Ratings group in London. "KBC's goal, as with its first CDO, is to achieve regulatory capital relief by transferring the credit risk associated with a portfolio of credit exposures to corporates and finance companies to investors."

This transfer will be achieved by combining a credit default swap between CYGNUS and KBC with funded and unfunded liabilities via the issue of floating-rate notes and the entering into of a "super senior" credit default swap with a counterparty.

The collateral for the notes is a portfolio of securities (Obligations Lineaires) issued by the Kingdom of Belgium (AA+/Stable/A-1+), which are purchased via a repurchase agreement.

Key rating points are as follows:

-- The adequate level of subordination beneath each class of

notes;

-- The sound mechanics of the repurchase agreement and the credit

default swap; and

-- The sound legal structure of the transaction.

A copy of Standard & Poor's complete presale report for this transaction is available on RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. The report is also available on Standard & Poor's Ratings Services Web site at www.standardandpoors.com. Under Presale Reports, select Structured Finance, then Asset-Backed Securities.

PRELIMINARY RATINGS ASSIGNED
CYGNUS FINANCE 2001-1 PLC
EUR214 Million Floating-Rate Notes due 2008
Class        Rating       Amount (EUR)
A            AAA          80
B            AA           46
C            A+           38
D            BBB          20
E            BB           30