In its methodologies of structured transactions ARC Ratings applies:

• The inherent economic value of structures

• Models to assess creditworthiness, as supplements to qualitative analysis

• Assessment of the underlying assets as the basis for rating structured transactions

• Complexity of structures

• Stress-testing against the background of extreme scenarios

• Strict external controls by rating only such structured transactions with full disclosure by their prospective issuer

• Strict internal controls, prohibiting ARC Ratings to advise issuers on optimal composition of any structured transactions

Structured Finance transactions include all forms of asset backed securities, amongst others: Residential and Commercial Mortgages, Auto Loans, Consumer Loans, Trade Receivables, Repack Vehicles, Equipment Leases and Structured Credit.

ARC Ratings Global Structured Finance Rating Methodology lays down the fundamental considerations for any structured finance transaction rated by ARC Ratings and is complemented by specific criteria for each major structured finance asset type.