HONOLULU, HI -- (MARKET WIRE) -- August 1, 2005 -- Kamakura Corporation announced today that its monthly index of troubled companies in the United States dropped to 13.4% of the public company universe in July, the second monthly decline in a row. The index had been at 16.0% of the public company universe in both April and May. The Kamakura troubled company index remains well above the most recent low point of 11.1%, reached in April 2004. The index has been moving in a range between 11% and 16% since August 2003 after topping 30% at the height of the last recession. Kamakura classifies any company with a default probability of more than one percent as troubled.
"The Kamakura troubled company index remains at levels above its recent lows but the strong economy has kept the index from rising beyond its recent peak of 16%," said Warren Sherman, Kamakura President and Chief Operating Officer. "The number of companies with default probabilities between 1% and 5% improved to 7.9% of the universe in July from 8.4% in June and 9.6% in May. Companies with default probabilities between 5 and 10% were down to 1.9% of the universe from 2.1% a month earlier. Companies with default probabilities between 10% and 20% were up 0.1% to 1.6% of the universe. The riskiest firms in the universe, those with default probabilities over 20%, improved 0.2% to 2.1% of the universe in July."
Kamakura is offering free trials of its KRIS default probability and default correlation service to qualified institutions. For more information on Kamakura's free trial offer please contact Kamakura at info@kamakuraco.com. More information can also be found on the Kamakura Corporation web site www.kamakuraco.com and in Advanced Financial Risk Management (John Wiley & Sons, 2004) by Kamakura's van Deventer, Kenji Imai, and Mark Mesler (available on www.amazon.com). Advanced Financial Risk Management was recently named "best finance book of 2004" on www.riskbook.com.
Kamakura Corporation is a leading provider of risk management information, processing and software. Kamakura has been a provider of daily default probabilities and default correlations for listed companies since November, 2002. Kamakura launched its business mortality model for unlisted companies in January 2004. Kamakura is also the first company in the world to develop and install a fully integrated credit risk, market risk, asset and liability management, and transfer pricing software system. Kamakura has clients ranging in size from $3 billion in assets to $1 trillion in assets. Kamakura's risk management software is currently used in the United States, Germany, Canada, the United Kingdom, Australia, the Middle East, Japan, China, Korea and many other countries in Asia.
Kamakura's research effort is led by Professor Robert Jarrow, who was named Financial Engineer of the Year in 1997 by the International Association of Financial Engineers. Professor Jarrow and Dr. van Deventer were both named to the 50-member RISK Hall of Fame in December 2002. Kamakura management has published twenty-one books and more than 100 publications on credit risk, market risk, and asset and liability management. Kamakura has world-wide distribution alliances with IPS-Sendero (www.ips-sendero.com) and Unisys (www.unisys.com), making Kamakura products available in almost every major city around the globe.