Standard & Poor’s Ratings Services recently began monitoring the effects of Hurricane Katrina on the economy and on credit, industrial, energy and utility, financial services, insurance, and public finance issuers and reports, based on a preliminary analysis, that the damage caused by Hurricane Katrina will not result in any of the outstanding hurricane-related catastrophe bonds’ hitting their respective attachment points, so therefore, we have not placed any catastrophe bond ratings on CreditWatch. Standard & Poor’s has ratings outstanding on $4.25 billion of natural peril catastrophe bonds. Of this, $1.61 billion carries an exposure to North Atlantic hurricanes, generally covering the Gulf and Eastern Seaboard states from Texas to Maine. In aggregate, these hurricane bonds have an average life of 1.91 years, with the longest-dated bond maturing on June 30, 2009 (in 3.8 years). Of these, $630 million is parametric, dependent only on measurements of wind speed or storm intensity, as provided by the National Hurricane Center of the National Oceanic and Atmospheric Association. However, the majority of the notes–$975 million-are indemnified, which means they are based on actual insured losses. These hurricane notes are rated mostly in the ‘B’ to ‘BB+’ range, although two with exceptional structural subordination are rated higher: the Class B notes of Foundation Re Ltd. are rated ‘BBB+’, and the Arbor II Ltd. Series 1 notes are rated ‘A+’. The parametric notes are structured to emphasize coverage of Florida exposures, and Hurricane Katrina is unlikely to cause them any principal loss. The companies protected by the indemnity notes are still assessing the effects of Katrina. At this point, none of the notes seems likely to attach. The credit ratings on building materials companies followed by Standard & Poor’s will not be affected by the storm, given the lack of significant exposure to the area. Also, any positive effect will not be seen immediately.