(*Notes)
Fees and other important disclosures pursuant to Financial Instruments and Exchange Law of Japan
Please be aware that there are various risks and fees may be incurred for securities investments.

— Securitization Division —

Securitization has been the core business in the Shinsei group for years and the Securitization Division is well positioned in a market to arrange new structures by utilizing high financial technology and provide added-value securitization products with investors and originators.

<Products Lineup>

• Securitization of Monetary Claims (ABS):Back assets are Credit Card Loans and Lease Loans.
• Residential Mortgage Backed Securities (RMBS):The cash flows come from residential debt such as residential mortgages and housing loans.
• Commercial Mortgage Backed Securities (CMBS):The security its cash flow comes from non-recourse loans of commercial mortgages, offices, shopping centers, hotels and so forth.
• Whole Business Securitization (WBS):Securitization of future cash flows to be generated by operating businesses.
• Covered Bond:The bonds to be issued based on credit enhancement on the grounds of synergies between issuers and the pool of well performed assets.

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— Product Solutions Division —

<Products with high added value>

The Product Solutions Division utilizes derivative techniques to deliver high added-value services. We offer a broad range of products, from principal-protected to high risk and return, and structure and provide products for asset management, risk hedging, financing, and various other needs. We are facing to Financial Institutions who wish to invest in added-value products or seek to generate earnings from option and market movements, and retail customers who are interested in structured notes through Securities Intermediary Business (Chukai). We also provide corporate customers with equity related balance sheet solution.

<Products and Services>

• Exchangeable Bond
• Index Linked note
• Equity Swap
• Index or tailor-made baskets
• Stock lending and borrowing

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— Product Solutions Division —

There has been a dramatic expansion of the Japanese credit and alternative products market in recent years. To fulfill the rapidly diversifying needs of customers involved in asset and portfolio management, the Product Solutions Division of Shinsei Securities can offer sophisticated, bespoke solutions based upon derivatives and other advanced financial techniques as well as access to a wide range of more traditional products.

<Enriched product lineup>

We offer an extensive lineup that ranges from flow products, such as Japanese and overseas corporate bonds and credit default swaps, to customized repackaged bonds and structured credit products.

<Opportunities to invest in various asset classes>

For portfolio risk diversification matched to each customer’s risk/return profile, we facilitate access to a variety of asset classes through alternative investment products. The principal-protected bond linked to the performance of overseas hedge funds is one example.

<Products and Services>

• Corporate bonds, domestic and international
• Asset backed securities
• Credit default swaps
• Synthetic CDOs
• Default baskets
• Credit-linked bonds and loans
• Repackaged notes, index-linked bonds, etc.
• Performance-linked bonds (fund-linked CPPI bonds), etc.

*This transaction may result in economic losses due to a drop in bond prices as a result of interest-rate fluctuations, the weakened credit status of reference organizations, reference assets, issuers, swap counterparties and so force, or any other factors.

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— Product Solutions Division —

< Providing Interest Rate / Foreign Exchange products through Medium Term Notes Program >

The Product Solutions Division offers solutions to institutional investors and retail customers through intermediary operations, centered on MTNs (medium-term notes), which makes it possible to issue bonds efficiently. We originate and introduce investment products that meet the needs of various customers by compounding, as needed, derivatives linked with interest rates and exchange rates into bonds issued by domestic and overseas issuers, including Shinsei Bank. We also respond to funding and the hedging needs on a case-by-case basis.

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— Product Solutions Division —

Our Product Solutions Division provides a wide range of mutual funds, which give investors access to various regions/markets and asset classes.

<Products lineup>

In addition to equities and fixed-income linked funds, we offer the funds that invest in alternative assets, such as hedge funds. These funds give investors access to a range of markets depending on the individual funds criteria and objectives. From among these products and given the prevailing market environment, we continually assess what best meets our customer’s investment profile.

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— Securities Intermediary Business Development Division —

Given Shinsei’s structuring expertise, we are able to offer a wide range of competitive and attractive financial products which are targeted at investors seeking enhanced yield. We seek to make these products available to investors through establishing intermediary arrangements with Banks and other financial institutions. Shinsei Securities has concluded an intermediary contract with Shinsei Bank and through this, we have provided a wide variety of investment products. We are actively seeking further partnerships with regional banks who wish to broaden the investment products offered to their customers

<Examples of structured financial products that we offer>

Forex linked bonds, Nikkei or Stock price linked bonds, Interest rate linked bonds, Commodities linked bonds, etc.

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— Fixed Income Research Division —

The Fixed Income Research Division seeks to deliver unconventional, innovative research reports with a fresh dimension. Editing is based on a system where young analysts and research report editing specialists work together as a single team with veterans possessing over ten years analyst experience at the core.

<Ever Evolving Research Department>

To increasingly raise customer satisfaction is one of the key issues for Shinsei Securities. The research department is being strengthened as a critical tool for such. In order to more proactively advance the provision of information to customers as one customer service that has been upgraded further, the research department at Shinsei Securities changed from the past "Credit Analysis Department" to the "Fixed Income Research Division" and launched full-scale research operations in September 2006.

<Pursuing New Domains for Research Entertainment Reports>

The distribution of an epoch-making research report unlike any before is being pursued with an innovative composition that would motivate readers to read and with clear, concise content.

As for the types of reports mainly delivered, regular reports are " Shinsei Credit Market Daily," which is distributed every evening, and "Credit Explore," a monthly credit research report distributed every month. Furthermore, special reports and such are occasionally distributed.

<Distributes "Shinsei Credit Market Daily" in an Epoch-Making Daily Report Style Every Evening>

The "Shinsei Credit Market Daily" is distributed every evening under the motto, "Providing fresh information for the day on that very day." This unique "daily" that resulted from adopting the rare form of a credit research report that is distributed daily and collaboration between credit analysis and trading has now become a renowned report of the Fixed Income Research Division.

This "daily" communicates the day’s significant movements in the credit market, such as the CDS market and actual bond market, and also provides a feature and commentary on high-profile new bond issues and hot topics that may possibly impact the market. Furthermore, the "daily" compiles changes in the ratings of Japanese firms as assessed by the five major rating agencies, including Moody’s and R&I, and the reasons for the changes.

<Publishes Innovative Monthly Credit Research Report "Credit Explore">

This monthly credit research report where the handwritten "Credit Explore" projects a novel image represents the Fixed Income Research Division’s enthusiasm for taking innovative approaches in respect to this report. This is a high-quality research report helpful for investments that is written by a team centering on veteran analysts based on years of experience in credit analysis and profound insights. Furthermore, an editing style from the standpoint of readers is adopted and this leads to novel editing and content unconstrained by convention. This report aims to tap a new domain for research entertainment reports that keep readers interested.

On top of these two types of regular reports, special reports that delve into individual themes are occasionally published.

<Senior Analyst Profile>

Yasuhiro Matsumoto
Matsumoto has over twenty years of credit analyst experience throughout his career. Starting off as an analyst at the credit division of a foreign bank, he served as ratings analyst at a U.S. ratings agency and ratings advisor at a European securities firm. Prior to joining Shinsei Securities, he was a senior analyst at credit research at a European securities firm. Featured several times by the media to date as a research analyst, what he does and says are keenly watched.

He has appeared in several TV programs in Japan and overseas, including the "Hodo Station" TV Asahi news program, the "Closing Bell" TV Tokyo stock market news program, Bloomberg TV, British Broadcasting Corporation (BBC) and CNBC Asia. Additionally, he has also received coverage in numerous newspapers, such as Nikkei Shimbun, Mainichi Shimbun and Yomiuri Shimbun, and numerous magazines, such as BusinessWeek, Mainichi Newspaper’s weekly economic magazine Economist and Asahi Shimbun’s weekly news magazine AERA.

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