Lightyear Capital Launches New Triple-A Rated Credit Protection Company
Athilon to Offer Credit Risk Protection of Structured Financial Assets
NEW YORK, NY (January 3, 2005) – Lightyear Capital, a private equity firm that manages more than $2 billion in assets, announced today that its fund, The Lightyear Fund, L.P., has provided the majority of the equity capital for newly launched Athilon Capital Corp., an innovative financial services company that, through its wholly owned subsidiary Athilon Asset Acceptance Corp., offers credit protection on a portfolio basis to investment banks, commercial banks, insurance companies and other institutions. Athilon was launched with approximately $250 million in capital, and has received counterparty ratings of Aaa from Moody's, and AAA from Standard & Poor's, the highest ratings assigned by such rating agencies.

Lightyear's co-equity investors are GM Capital Partners I, L.P., First Plaza Group Trust, a trust affiliated with certain GM pension plans, and Caisse de dépôt et placement du Québec.

Donald B. Marron, chairman and chief executive officer of Lightyear Capital, said, “Lightyear's partnership with and investment in Athilon offer us a unique opportunity to participate in the substantial growth in the demand for collateralized debt obligations and credit derivatives, as well as capitalize on the lack of available capital and capacity resulting partly from major insurance companies exiting certain non-core activities.”

Paul Sclafani, chief executive officer of Athilon Structured Insurance Advisors LLC, advisor to Athilon Capital Corp., said, “My interest in forming Athilon stemmed from two key market conditions which I witnessed first hand: the limited credit insurance and reinsurance capacity available in the surety, trade credit and financial guarantee markets for structured credit risk and the lack of resources devoted to creating convergence solutions between the insurance and capital markets. The Lightyear team's understanding of financial services and the opportunity Athilon seeks to capitalize on were the driving forces behind making the company a reality.”

Athilon, which will be based in New York , expects to write its first transaction in the first quarter of 2005. Athilon is unencumbered with a prior book of business and is expected to be competitive with established market participants due to its triple-A ratings, strong capital base, and innovative business structure.

Established in 2004, Athilon Asset Acceptance Corp. is one of the first companies offering credit protection to investment banks, commercial banks, insurance companies, corporations and other holders of multi-obligor portfolios in the form of credit swaps on the senior and super-senior tranches of such portfolios. The obligations of Athilon Asset Acceptance Corp. are unconditionally guaranteed by Athilon Capital Corp. Both Athilon Capital Corp., and its subsidiary, Athilon Asset Acceptance Corp., have received Triple-A counterparty ratings from both Moody's and Standard & Poor's, the highest ratings assigned by such rating agencies. Athilon Capital Corp. has been capitalized with nearly $250 million in debt and equity capital.

Lightyear is a private equity investment firm providing buyout and growth capital to companies in the financial services industry. Based in New York, Lightyear, through its affiliated funds, has managed approximately $3 billion of committed capital with investments across the financial services spectrum, including asset management, banking, brokerage, financial technology, insurance, leasing and related business services, and other sectors within financial services. Lightyear brings unique strengths and discipline to its investment process, as well as operating, transaction, and strategic management experience, along with significant contacts and resources beyond capital. The senior team of professionals has an average of 20 years of financial services-related experience and includes David Glenn, Stewart Gross, Donald Marron, Richard Sterne, and Mark Vassallo.

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