Independent Valuation and Risk Services Limited and CDO2 Solutions Limited

London, 26 May 2006

Independent Valuation and Risk Services Limited (“IVRS”), a subsidiary of Lombard Risk Management plc and a market leader in providing independent valuations of derivatives and hard to value securities for banks and investment funds, and CDO2 Solutions Limited (“CDO2”) whose CDOSheet® is a market-leading tool for pricing and risk analysis for structured credit derivatives, are pleased to announce that they have entered into a strategic alliance under which IVRS will have exclusive access to CDOSheet® to provide independent valuations of client positions in CDO tranches and CDO squared structures.

IVRS is further pleased to announce that it has appointed Dr Nicholas Stewart as Head of Structured Credit Products. Nick Stewart, who has a quantitative analysis background, was previously Head of Product Development at Tamesis Limited (formerly Summit Financial Systems Limited) and product specialist for credit derivatives for Patsystems PLC following its acquisition of Tamesis in 2005. Prior to this he spent three years in quantitative analysis in Deutsche Bank, London’s Global Relative Group.

Commenting on the alliance:

Ian Hopkins, Managing Director of IVRS, said “We are delighted to be formalising our working relationship with CDO2, and that Nick Stewart is joining us to accelerate our activities in this fascinating and growing sector. Our activities to date have shown that there is a very clear need across the market for a source of fast and accurate valuations of these complex structures, and the valuation models must have the flexibility to deal with the many unique features that we encounter. Adding CDO2’s and Nick Stewart’s skills, experience and insights into these products to our existing capabilities will bring real added benefits to our clients whose positions and portfolios we value.”

Gary Kendall, founder and owner of CDO2 said “We are very impressed by IVRS' approach to delivering independent valuations for client portfolios and are delighted to be working with them. Their market knowledge and expertise, combined with the market data available to them, gives their independent valuation service the same capabilities for comprehensive pricing and risk analysis of structured credit portfolios as any of our customers who run CDOSheet® in-house."

Contacts:

Lombard Risk Management plc

John Wisbey Chairman and CEO
020 7384 5000
john.wisbey@lombardrisk.com

IVRS

Christopher Rose CEO
020 7384 5002
christopher.rose@lombardrisk.com

Ian Hopkins MD
020 7384 5093
ian.hopkins@lombardrisk.com

CDO2

Gary Kendall
0845 4564460
gary-kendall@cdo2.com

Notes to Editors

Lombard Risk Management plc

Lombard Risk commenced trading in 1989, and is a fast growing company focused on software and independent valuation services for the financial industry. Lombard Risk’s software is in the areas of valuation, risk management and regulation. The firm’s Oberon® and Firmament® software products allow customers to value and manage risk on a wide variety of financial instruments with a primary focus on interest rate, credit and foreign exchange derivative and cash markets. Lombard Risk’s Colline® software, which is delivered either as software or as an ASP service, is a market leader in collateral management. Lombard Risk’s group company STB Systems is the market leader for bank regulatory reporting software in the UK through the STB-Reporter product.

Lombard Risk is headquartered in London, with offices including New York, Shanghai, Hong Kong and Singapore. Lombard Risk’s main customer base consists of banks, investment firms, asset managers, hedge funds and fund administrators, and energy companies. In the UK Lombard Risk does business with over 40% of the 350 banks that operate in the UK. Internationally Lombard Risk has dealings with over 20 of the top 50 banks in the world and many of the leading names in the hedge fund industry.

Lombard Risk’s shares are quoted on AIM, the London Stock Exchange’s specialist market for growth companies, under the ticker symbol LRM.

Independent Valuation and Risk Services Limited

Independent Valuation and Risk Services Limited is a subsidiary of Lombard Risk Management plc and is a leader in providing independent valuations and risk measurements of OTC derivatives and hard to value securities for banks, investment funds, administrators, custodians and other institutions. Using a backbone of Lombard Risk’s Firmament® and Oberon® software and other best of breed or industry standard models where appropriate, it provides these services on an outsourced basis.

CDO2 Solutions Limited

CDO2 is a provider of innovative pricing and risk technology for organisations trading structured credit products. The company was founded on the belief that all financial organizations should have access to the latest pricing models and enterprise technology, irrespective of their size or trading volume. CDOSheet® allows users to harness the power of grid computing to price and risk manage CDO and CDO squared tranches using simple spreadsheet functions. More information on CDO2 and CDOSheet® can be found at http://www.cdo2.com.