Sovereign Issuers Need to get More Active with Investors - Ratings and Reports not Enough

Key Findings from King Worldwide's In-depth Study of Leading Global Investors in Sub-G20 Sovereign Debt

LONDON and NEW YORK, January 31, 2011 - Despite the extra pressure caused by the global financial crisis, few
Sub-G20 sovereign debt issuers have made efforts to improve their
communication with the financial markets post-crisis, even though the
majority of investors in the sector are asking for more information and
updates. This is one conclusion of an international survey* of 25 leading
investors in the sector with aggregate holdings of over $400 billion
conducted by King Worldwide, the leading global stakeholder communications
company.

Currently only around one in three issuers provides information and
updates at least once a year whereas half of investors in this debt would
like updates at least once a quarter. Investors also request more frequent
meetings with issuers.

Many issuers do provide information when the debt is issued but given
that many investors are far more likely to invest in the secondary rather
than primary market the results demonstrate the importance of knowing rather
than assuming who is holding the debt. In addition, since the majority of
these investors may have not met the issuer on the deal roadshow, these
results also underscore the importance of meeting with those secondary market
investors once they have been identified.

When considering an investment in particular Sub-G20 issue, above and
beyond the right risk-reward ratio, the key factors important for investors
are:

    - Political stability - 80%
    - Strong track record of debt repayment - 80%
    - Liquidity - 80%
    - Transparent and frequent communications - 76%

There is a clear split between those investors whose investments are
restricted by credit ratings and those who are not. For well over half of
those without restriction, the actual rating is not important in their
decision whether or not to invest and more generally the research produced by
ratings agencies does not play a key role. Only one in three see it as
important, a lower mark than given to research produced by the investment
banks, but even here, only 40% rate investment bank research as important.

There are further differences between the restricted and non-restricted
groups with those restricted by credit ratings more focused on political
stability, and a strong track record of repayment, but (given the apparent
safety net that a rating brings) less concerned to receive transparent and
frequent communications.

There are some signs that the profile of investors in Sub-G20 bonds has
changed in the past year. Around half see there as being more "fast money"
invested than in previous years.

Interestingly, although by a two to one margin investors believe that
Sub-G20 issuers should be managing their debt profile more actively; few -
one in five - expect any significant issuance from this group during 2011,
two-thirds do not.

The media too plays a role. Although not a key determinant of investment
decisions, it is clear that negative coverage is important, with investors
five times more likely to take notice than if coverage is good

Commenting on the conclusions of the research, Oliver Niedermaier CEO at
King Worldwide said: "This research reinforces the opportunity that issuers
have to create a more direct engagement with the financial markets. It shows
quite clearly that the information flow should be improved, and that the
sovereign debt issuers need to be more proactively managing relationships
with investors through a more structured communications programme that gets
to the end investor directly"

* Interviews conducted in November 2010 to January 2011

About King Worldwide

King Worldwide is the leading global Financial Communications and
Stakeholder Management firm. Founded in 2007 as Sage Holdings, King Worldwide
has prudently acquired companies occupying top-tier positions in their
respective areas of financial communications, investor relations, proxy
services, media relations, online communications and financial document
processing.

Today, the King Worldwide family is comprised of Europe's fastest-growing
financial communications consultancy M:Communications, the premier
international investor relations consultancy Taylor Rafferty, the top-ranked
Nordic investor relations and online communications firm Hallvarsson &
Halvarsson, the alternative asset investor and media relations consultancy
Broadgate Consultants, the premier capital markets intelligence company
Capital Precision, the leading proxy solicitation company D. F. King & Co.
and bankruptcy specialist Donlin, Recano and Company. King Worldwide employs
over 900 staff, serving over 1,000 clients from offices in New York, Chicago,
London, Stockholm, Moscow, Dubai, Hong Kong and Taipei.

For more information:

London: Stuart Leasor +44-20-7920-2317, sleasor@king-worldwide.com

New York: Liz Cohen +1-212-269-5733, Liz.Cohen@king-worldwide.com

For more information: London: Stuart Leasor +44-20-7920-2317, sleasor at king-worldwide.com; New York: Liz Cohen +1-212-269-5733, Liz.Cohen at king-worldwide.com