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GLOBAL ABS 2007 SPAIN - Housing and RMBS Market Highlights Barcelona, 13 June 2007

GLOBAL ABS 2007 SPAIN - Housing and RMBS Market Highlights Barcelona, 13 June 2007. SPAIN – Housing and Mortgage Markets. House price growth rate continues its gradual decrease - 7.2% in 1Q07 from 18.3% peak in 4Q03.

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GLOBAL ABS 2007 SPAIN - Housing and RMBS Market Highlights Barcelona, 13 June 2007

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  1. GLOBAL ABS 2007 SPAIN - Housing and RMBS Market Highlights Barcelona, 13 June 2007

  2. SPAIN – Housing and Mortgage Markets • House price growth rate continues its gradual decrease - 7.2% in 1Q07 from 18.3% peak in 4Q03. • Isolated negative quarterly growth has been spotted in large urban areas, like Madrid for new dwellings (4Q06 vs. 4Q05 - price per sq. meter). • Housing supply may still have to gradually reduce growth from previous years. Housing demand showing clear signs of slowing activity. • During 2006 the number of housing market transactions showed decreasing growth rates reaching 0.1% in 4Q06 vs. 3Q06 (last 12 month figures).

  3. SPAIN – Housing and Mortgage Markets • Borrower’s affordability affected by higher interest rates - resets for ARMs will still be felt during 2H07. • +1 million mortgages originated in 2006 – more moderate mortgage growth is expected (5% - 8%) with HLTV mortgages increasing share of total origination. • Residential mortgages 90+ dq in Spain stood at 0.46% as of 1Q07 (up from 0.39% in 1Q06 and 0.30% in 1Q05). • Fitch’s RMBS 3 Month+ Index shows arrears reaching a peak of less than 0.3% on average, after less than two years since closing. • More HLTV RMBS coming to the market – mortgage insurance favoring credit enhancement and improved execution.

  4. Who We Are ... AIG United Guaranty … • Member company of AIG - the largest insurance company in the world by market value, with operations in more than 130 countries • Specialist insurer which manages all mortgage insurance risks • 40+ years experience… tested in downturns • $142BN mortgages insured worldwide • Present in 18 locations globally (10 in Europe) • Dedicated local resources, people and know-how … Committed to credit protection and innovative solutions for customers • Monoline insurer with a proven track record… fewer than 0.3% claims denied since 1963 • Unmatched financial strength… Rated AA or higher by all three major agencies • Only mortgage insurer able to offer structured capital relief through an OECD affiliate • Global risk program to protect customers wherever they are • Steady support to customers in designing new and specialized products and exploring new opportunities • Access to the wide range of AIG products and services

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