Fitch Ratings has announced a new proposal designed to provide greater transparency into the interplay between default risk and loss given default than heretofore has been available to the market:

--New ratings scale designed to add greater transparency by combining probability of default measures with loss given default analysis.

--New methodology to be global in scope.

--Introduction of a benchmark measure of default probability, the Issuer Default Rating.

--New Recovery Rating Scale proposed, focusing on lower-rated speculative-grade securities.

The addition of more information on recovery prospects, in conjunction with the IDR, recognizes the market's need for bifurcated information on the two main elements of credit risk.

Fitch's enhanced methodology is being introduced to the market as an Exposure Draft for the purposes of soliciting feedback from investors, issuers and other market participants during a one-month comment period. Any ratings changes are expected to be implemented during the year, following sector and individual company reviews.

Proposed Recovery Scale

Fitch's new Recovery Scale ranks securities on scale of R1 (high recoveries) to R6 (low recoveries) in order to provide better estimates of potential recovery values in bankruptcy/liquidation.