The following is a press release from Moody's Investors Service: London, 08 June 2010 -- Moody's Investors Service has taken the following rating action on the covered bonds issued by Achmea Hypotheekbank N.V. (Achmea or the issuer) under its Dutch mortgage covered bond programme (the Programme): - mortgage covered bonds: Aa2 confirmed; previously on 23 April 2009 downgraded to Aa2 from Aaa on review for downgrade and kept on review for further downgrade. Today's rating action followed Moody's conclusion of its review of the covered bonds (see press releases dated 23 April 2009 (the Review PR) and 9 November 2009) following Achmea's restructuring of certain aspects of the Programme. The main changes were: - The total return swap between the covered bond company (CBC) which holds the cover pool and Achmea has been supplemented with a Novation Agreement which provides for the swap to be transferred to the Royal Bank of Scotland plc (Aa3/P-1) following an issuer default or failure to post collateral; - A Collection Foundation has been established to directly receive all payments made by borrowers under mortgage loans, which will have the effect of protecting these cashflows and can also be expected to enhance continuity of borrower payments following an issuer default (in the event borrowers have not already been notified to make payments directly to the CBC prior to this time); - Achmea will replace itself as Administrator (cash manager) with ATC Financial Services B.V., an experienced provider of administration services in the Dutch market. The appointment of ATC supports continuity of administration for the Programme in the event of an issuer default; - The reserve fund providing liquidity for the covered bonds has been increased to cover the next interest payment due on each series of covered bonds (or, if higher, the interest due in the next three months) or, if the interest is swapped, the next three months' swap payments for each series, plus three months' senior expenses and - The rating-based trigger for notification of mortgage loan borrowers has been lowered from Baa1 to Baa3. The same change has been made to the trigger for Achmea as Servicer to use reasonable efforts to replace itself. Moody's review of the Programme focused primarily on the TPI of the programme in light of the structural amendments, in particular those listed above. Following the restructuring Moody's is of the view that the TPI of the Programme should remain unchanged. Based on this TPI, a Aa2 rating on the covered bonds remains achievable given the issuer's rating. Both Issuer rating and Timely Payment Indicator for this transaction are unpublished. Moody's review also considered the expected loss analysis of the covered bonds and in this case focused on the effect of strengthening the total return swap arrangements by adding the novation agreement with a suitably rated external counterparty. This improves the likelihood that following issuer default there will be continued hedging of mismatches between the interest received by the CBC on the cover pool assets and the CBC's payments to swap counterparties to hedge interest rates on the covered bonds. Following the deterioration in the credit strength of the issuer as referred to in the Review PR, and taking into account the above changes, the over-collateralisation in the cover pool that Moody's considers "committed" has been increased by the issuer to 16%, which is consistent with a Aa2 rating. RATING METHODOLOGY Moody's rating for any covered bond is determined after applying a two-step process: (1) Moody's determines a rating based on the expected loss on the bond. This is modeled as a function of the issuer's probability of default and the stressed losses on the cover pool assets following issuer default; and (2) Moody's assigns a "timely payment indicator" (TPI) which indicates the likelihood that timely payment will be made to covered bondholders following issuer default. The effect of the TPI is to limit the covered bond rating to a certain number of notches above the issuer's rating. TPIs: TPIs range from "Very High" to "Very Improbable". Higher TPI levels indicate legal, structural, regulatory/systemic or collateral features of a programme which benefit timely payments. Lower TPIs indicate uncertainties regarding timely payment, such as the existence of refinancing risk. Private Ratings: To calculate the issuer's probability of default Moody's will normally use the issuer's senior unsecured debt rating. However for this Programme, at the request of the issuer, the senior unsecured rating is not published. Moody's believes this reduces the transparency and analytical value of the covered bond rating. The principal methodologies used in rating the transaction were "Moody's Rating Approach to European Covered Bonds", published in March 2010, and "Assessing Swaps as Hedges in the Covered Bond Market", published in September 2008. These can be found on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issue can also be found in the Rating Methodologies sub-directory on Moody's website. In addition, Moody's publishes a weekly summary of structured finance credit, ratings and methodologies, available to all registered users of our website, at www.moodys.com/SFQuickCheck. The rating assigned by Moody's addresses the expected loss posed to investors. Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks have not been addressed, but may have a significant effect on yield and to investors. Copyright 2010 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC.'S ("MIS") CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. 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