Confidential Presentation to: Kellogg Business School
Anatomy of a Credit Collapse
The Market and Macro Economic
Fallout of the Sub Prime Mess
Lehman Brothers MBS and Rates
Research
November 13th, 2007
Agenda
Laying
the blame
– Underwriting practices
– The changing intermediation process
 Reaping
the whirlwind
– The magnitude of losses
– The entities at risk
– ABCP and SIVs
 Will
bank losses exacerbate the economic weakness?
The Altered Origination Landscape
$2.35trn Sub-Prime and Alt-A / B Mortgages…
Composition of the Aggregate Mortgage Universe, $bn
Outstanding by Vintage / Sector ($bn)
Sector
Prime
Agency
Jumbo
Alt-A / Alt-B
Sub-Prime
Total
<2003
2004
2005
>2006
Total
1,485
630
815
820
3,750
830
630
484
456
2,400
94
191
432
433
1,150
114
143
392
550
1,200
2,523
1,594
2,123
2,259
8,500
________________
Source: Loan Performance, Inside B&C Lending, Lehman Brothers.
1
Excess Capacity in the Origination Industry Led to Loose
Underwriting Standards

Origination volumes in late 2005 / 2006 remained high despite the fall in rate incentive

The share of high CLTV and lim-doc loans increased significantly

Contrary to popular perception, the share of investor properties didn’t change much
Characteristics of Non-Agencies 1
Origination Volumes $bn
2003 2004 2005 2006
4,000
% CLTV >80
31
42
46
51
% CLTV >90
14
22
25
29
% IO
17
39
51
49
% Lim-doc
43
48
56
64
% Investor
9
11
12
12
3,000
2,000
1,000
0
2000 2001 2002 2003 2004 2005 2006
Agency
Other
________________
Source: MBA, Loan performance and Lehman Brothers
1. Includes prime jumbo, alt-A and subprime loans.
2
… Risky Lending Practices Continued
% Originations to Borrowers with Layered Risks
(%)
8%
6.6%
5.9%
6%
5.2%
4.1%
4%
2.9%
2%
1.4%
1.8%
0.6%
0%
1H’03
2H’03
1H’04
2H’04
1H’05
2H’05
1H’06
2H’06
Layered Risk
________________
Source: Lehman Brothers. Layered Risk is defined as loans with Limited Documentation, >45% DTI and >95% CLTV.
3
Helped by a Strong Housing Market
National Quarterly Home Price Appreciation (HPA), Annualized
(%)
20%
15%
10%
5%
0%
1Q’00
2Q’01
3Q’02
4Q’03
________________
Source: OFHEO.
4
1Q’05
2Q’06
Securitizations Let Originators Layoff Most of
the Risk

Most inv-grade subordinates created in recent years have been by absorbed by CDOs

The rate impact of CDO demand for borrowers was limited…

… The more important effect was the ‘commoditization’ of credit
Issuance in ABS CDOs $bn
Change in Borrowing Costs
($bn)
200
Size %
150
AAA
100
Credit Spreads (bp)
2003 2006 Change
81%
35
15
-20
AA
5%
100
32
-68
A
5%
150
40
-110
BBB
6%
325
175
-150
Total
97%
60
26
-34
50
0
2000 2001 2002 2003 2004 2005 2006 2007
High Grade
(1)
Mezzanine
________________
Source: Lehman Brothers
1. The 2007 numbers are YTD estimates, but there should be no issuance for the rest of the year.
5
The Markets Underestimated the Importance of Equity as an
Attribute Driving Performance

Unlike previous episodes, credit score has proved less important than equity

Rating agency assumptions around loans with piggyback seconds were rather benign
Cumulative Non-Performers (1)at 12 WALA
Conforming
Rating Agency Assumptions in 2006 (2)
Non-Conforming
FICO
80 CLTV
100
CLTV
80 CLTV
100
CLTV
650
3.5%
9.0%
3.4%
19.0%
675
2.0%
6.3%
2.3%
14.5%
700
1.7%
5.7%
2.0%
13.4%
725
1.1%
4.4%
1.8%
10.7%
750
0.6%
3.2%
0.7%
8.5%
LTV
CLTV Frequency Severity
Loss
80
80
1.0x
1.0x
1.0x
80
100
1.5x
1.0x
1.5x
100
100
4.0x
1.6x
6.4x
________________
1. Cumulative non-performers include 60 day + delinquencies (OTS style) and any cum. defaults. We show numbers for 06 originations
2. Reprint from the 2006 Securitized Conference.
6
Credit Score Has Become Less Relevant
In 2000 Orig.
In 2006 Orig.

620 vs. 720 FICO = 5 to 10 times underperformance

70 vs. 100 CLTV = 2 to 5 times underperformance

620 vs. 720 FICO = 3 to 5 times underperformance

70 vs. 100 CLTV = 9 to 13 times underperformance
CNP across FICO / CLTV – 2000
70
CLTV
80
90
CNP across FICO / CLTV – 2006
100
70
CLTV
80
90
100
F
620
4.5%
6.5%
9.8%
8.7%
F
620
2.4%
5.3%
11.2%
15.8%
I
660
3.0%
3.9%
6.1%
6.5%
I
660
1.4%
3.6%
7.9%
12.3%
C
700
1.4%
1.8%
3.9%
4.1%
C
700
0.9%
2.5%
4.2%
9.6%
O
740
0.4%
0.8%
2.7%
2.2%
O
740
0.4%
1.0%
1.9%
6.0%
12
Originator Problems and a Highly Visible ABX Index Hastened
the Inevitable

Buyout requirements created significant problems for subprime originators

In recent months, liquidity in the capital markets has dried significantly …

… Rates for non-conforming borrowers are now 100–300bp wider
Pricing of the Active ABX Indices (1)
Rates Available to Borrowers (2)
2,800
BSAM’s Hedge Funds
and ABCP Issues
2,100
1,400
Dec 31
Jun 30
Oct 05
Agency
6.25
6.65
6.45
Jumbo
6.50
6.95
7.50
Alt-A
7.10
7.60
8.5–9.0
HEL
8.25
8.80
10.5–11.0
Subprime Originator
Problems
700
0
Sep-06
Dec-06
AAA
AA
Mar-07
Jun-07
A
BBB
Sep-07
BBB-
________________
1. We show the most current ABX index pricing. We used 2007-1 as the current index through out 2007.
2. Lehman Brothers estimates
7
CDOs – the New Intermediation
Technology
The ABS CDO Market Grew Dramatically in 05/06
Issuance in New ABS CDO Deals $bn
200
150
100
50
0
2000
2001
2002
2003
2004
High Grade
2005
Mezzanine
11
2006
2007
What Exactly Do ABS CDOs Hold?

High grade CDOs own AA/A assets while Mezzanine CDOs own BBB/BBB- assets

A large part of the ‘A’ exposure in high-grade CDOs is other CDO liabilities
Balance Sheets of ABS CDOs
a. High Grade CDOs
Assets
b. Mezzanine CDOs
Liabilities
Size
Spreads
AAA
8.2%
20
AA
42.3%
A
Assets
Size
Spreads
AAA Sen.
85%
20
35
AAA Jun
10%
46.0%
90
AA-BBB
BBB
3.5%
150
Total Liab
BBB-
0.0%
250
Mgt Cost (1)
BB
0.0%
400
Total
100.0%
63
Equity
Liabilities
Size
Spreads
AAA
0.0%
20
40
AA
0.3%
4%
200
A
99%
29
1%
Size
Spreads
AAA Sen
70%
25
35
AAA Jun
10%
50
1.4%
70
AA-BBB
15%
400
BBB
47.5%
125
Total Liab
95%
83
20
BBB-
48.0%
225
Mgt Cost
ROE
BB
2.8%
400
19.1%
Total
100.0%
180
12
20
ROE
Equity
5%
20.4%
The Underlying Assets in ABS CDOs Will Likely See
Significant Losses
Estimated Price of the ABX Across HPA Scenarios
AA
A
BBB
HPA and Losses Implied by ABX07-1 Pricing
BBB-
Price
Implied
Coll Loss
Implied
HPA
AA
50.0
24
-22
A
29.5
22
-20
BBB
19.5
20
-17
BBB-
18.5
21
-18
120
100
80
60
40
20
0
-20
-16
-12
-8
-4
0
4
HPA (%)
13
Most of these Losses Will be Borne by AAA CDO Holders

Even assuming sequential payments, AAA CDOs take significant losses

Our projections here are lower bounds since we don’t account for CDOs in CDOs (most
applicable to high-grade CDOs)
Losses on ABS CDOs ($bn) 1
Distribution of Losses by Rating
Losses Across HPA Scenarios ($bn)
Vintage
Bond Bal.
Recent
0 HPA
-8 HPA
Recent
Stress
70.2
-
-
-
0.5
Post 06
88.1
-
-
6.8
28.6
Total
158.3
-
-
6.8
29.1
-6 HPA
Stress
High Grade CDOs
High-grade
Pre 05
0 HPA
AAA Sen
–
–
–
9.4
Mezz
–
–
5.8
18.2
Equity
–
–
1.0
1.4
Total
–
–
6.8
29.1
AAA Sen
–
8.7
56.5
76.9
–
8.3
39.5
39.5
Mezzanine CDOs
Mezzanine
Pre 05
76.8
0.1
5.5
26.4
39.3
Mezz
Post 06
102.7
1.6
38.4
79.1
86.6
Equity
1.7
9.5
9.5
9.5
Total
179.5
1.7
44.0
105.5
125.9
Total
1.7
44.0
105.5
125.9
All CDOs
337.8
1.7
44.0
112.3
155.0
All CDOs
1.7
44.0
112.3
155.0
14
Who Owns AAA CDOs?

The largest holders of AAAs are bond insurers

Their loss exposures in stress scenarios could be high in relation to capitalization(1)
Estimated Holdings of AAA CDOs
Others
$65bn
Composition of Bond Insurer Portfolios
Other ABS CDOs
International 8%
6% Other CDOs
8%
11%
Education
MBS
4%
8%
Transport
ABS
6%
Health Care
4%
5%
Utility
General Oblig
10%
19%
Tax Backed
11%
Bond
Insurers
$95bn
ABCP/SIV
$60bn
CDO CP Put
Providers
$60bn
Insurance
Cos
$80bn
Total AAA ABS CDOs: $360bn
Total Portfolio Size: $1,600bn
________________
Source: Based on 10-Qs of AMBAC, MBIA, ACA, XLCA, FGIC and rating agency reports on bond insurers.
1.
The total capitalization of the bond insurance sector is about $18bn.
15
Who will Eat the Loss?
Aggregate Residential Mortgage Losses Can be as Much as
$250bn in Stress Scenarios …
This Appears Manageable in Itself
Expected Losses Across Housing Scenarios ($bn)
Size
Recent
0 HPA
-6 HPA
Stress
Agency
4,250
7.9
13.6
21.8
28.6
Prime
2,350
2.7
6.0
10.0
13.9
Alt-A
1,200
4.9
11.6
19.6
27.9
Subprime
1,200
22.8
77.8
122.5
171.3
Total
9,000
38.3
109.0
174.0
241.7
The Timing of Losses on Residential Mortgages ($bn)
60
40
20
0
2002
2003
Historical
2004
2005
2006
Recent HPA
2007
2008
0 HPA
________________
Source: Lehman Brothers Estimates.
8
2009
2010
-6 HPA
2011
2012
Stress
… the Risk Is that Large Holders of Credit Exposure Are Not
Sufficiently Capitalized
Who Owns Residential Credit Exposure?
1–4 Family Residential Mortgages $9,000bn
REITS
$150bn
GN
$400bn
Agency
$4,250bn
Securities
$1,900bn
600bn
FN / FH
$3,650bn
Thrifts
$800bn
100bn
Mtg. Ins.
$600bn
AAAs
$1,580bn
Inv-Grade
$260bn
40bn
Equity
$60bn
Others
$60bn
GSEs $350bn
Banks $300bn
Banks
$1,500bn
ABX Sellers
(Synthetics)
130bn
ABS CDOs
$430bn
CMBS / ABS
$60bn
CDO Mezz.
$60bn
CDO AAAs
$360bn
Overseas $320bn
ABCP $100bn
CDO Equity
$10bn
Others $470bn
(money mgr.,
sec-lenders, dealers)
Bond Insurers
$95bn
9
CDO CP Puts
$60bn
Insurance Co.
$80bn
ABCP / SIV
$60bn
The Largest Loan Holders Look Okay Except for MI Providers

The GSEs and commercial banks are rather well capitalized vs. loss expectations

MI companies look susceptible – there are some offsets from slowing speeds

Securitizations house most of the losses in residential mortgage
Projected Losses Across Major Sectors
Losses Across HPA Scenarios
($bn)
Portfolio
Size
Capital(2)
Annual
Revs. (3)
10 HPA
0 HPA
-6 HPA
Stress
GSEs
3,650
45
8.0
2.9
4.7
7.4
9.5
Banks
1,500
1,050
37.5
5.3
16.9
27.5
38.7
Thrifts
800
230
20.0
2.1
5.8
9.6
13.5
MI Companies
700
25
5.2
5.7
10.2
16.6
22.3
1,800
300
33.3
21.5
68.3
107.9
150.7
550
–
–
0.9
3.0
4.9
6.9
9,000
1,650
104.0
38.3
109.0
174.0
241.7
Securities(1)
Others
Total
________________
1.
Includes non-agency and subprime deals. Excludes any deals consolidated on balance sheets to avoid double-counting.
2.
Is the book value of equity for all entities except securities. For securities, we show the size of subordinates and equity pieces.
3.
2006 estimates of net revenues associated with just their mortgage portfolio.
10
ABCP Conduits and SIVs
The Various Flavors of ABCP Conduits

Multi-seller and single-seller vehicles are loan conduits

In ABS CDOs about $60bn in AAAs are financed as ABCP
Sec-Arb.
Multi-Seller
Conduits
Single-Seller
Conduits
Conduits
Structured Inv.
Vehicles (SIVs)
Loans
Loans
Securities
Securities
Total Assets ($bn)
680
190
195
350
Total CP Issued ($bn)
650
175
180
100(1)
Mark-to-Market?
No
No
Yes
Yes
68
72
60
18
Put Provider
(Usually a
AA bank)
Extendible,
Market value
swap
Put Provider
(Usually a
AA bank)
Liquidity
Provision (Usually
a bank line)
Type of Assets
US Residential Assets ($bn)
Liquidity Protection
________________
Source: Based on Moody’s and S&P reports on ABCP conduits / SIVs. As of August 6, 2007
1. SIVs have 100bn in ABCP and 250bn in MTNs
16
What Exactly Do ABCP Vehicles Hold?
Multi-Seller Conduits (680bn)
Other
25%
CBO/CLOs
4%
Student Loans
4%
Mortgage
Loans
Securities
9%
11%
Single-Seller Conduits (190bn)
Trade
Receivables
17%
Other
18%
Auto Loans
11%
Securities
6%
Credit card
receivables
14%
Mortgages
36%
Loans
9%
SIVs (350bn)
Other
13%
Residential
MBS
21%
Consumer ABS
13%
C&I Loans
12%
CBO &CLO
26%
Corporate
7%
Credit Card
Receivables
10%
Commercial
Sec-Arb Conduits (195bn)
Other
29%
Auto
19%
Financials
40%
CDO/CLO
11%
CMBS
12%
RMBS (U.K.)
17%
RMBS (U.S.)
6%
________________
Source: Based on Moody’s and S&P reports on ABCP conduits / SIVs. As of August 6, 2007. SIVs have 100bn in ABCP and 250bn in MTNs
17
Concerns around ABCP Conduits and SIVs
Two key questions

Will CP roll in coming months?

In the event CP doesn’t roll, is there risk of asset sales?
Outstanding Balance of ABCP, $bn
1,200
1,125
1,050
975
900
Mar-07
May-07
Sep-07
Jul-07
Unsecured CP
ABCP
________________
Source: Federal Reserve. We quote the non-seasonally adjusted balance.
18
Sep-07
Oct-07
ABCP Conduits with Significant Mortgage/CDO exposure Saw
Roll Problems and in Some Cases, Asset Sales

Problems have so far been concentrated in single-seller and sec-arb conduits

These vehicles have the greatest concentration of mortgages and ABS CDOs
Outstanding Balance in ABCP and the Liquidity Provisions
Outstanding Balance(1)
% Mortgage
Assets
Jul-31
Oct-3
Change
Type of Liquidity Provision
Extendable
Put Provider
Liquidity
Provision
Multi-seller
10
650
625
-25
–
100%
–
Single-seller
38
175
80
-95
100%
–
–
Sec-arbitrage
31
180
135
-45
10%
90%
–
5
100
85
-15
–
–
100%
CDOs with CP
90
45
0
-45
–
100%
–
Total
18
1,150
925
-225
94
740
85
SIVs
________________
1.
Based on data from rating agency reports on ABCP conduits and the Federal Reserve. The change in balance across sectors are
estimates from Lehman Brothers.
2.
Extendable vehicles usually have a market value swap provider who assumes the market risk of current loans.
19
MTM Losses and The Lack of a Liquidity Backstop Have
Made SIVs a Source of Concern
Asset Distribution of SIVs(1)
Estimated Maturity of Liabilties(1)
MTM
Losses
(%)
8.4
24.7
7.8
41.0
-1.36
RMBS (US)
5.2
0.4
0.1
5.7
-4.70
RMBS (UK)
15.7
1.3
0.1
17.2
-1.27
CDO / CLO
10.2
0.4
0.1
10.7
-3.50
Cons. ABS
12.3
0.1
0.2
12.7
-0.95
Other
10.8
1.2
0.6
12.7
-0.60
Total
62.7
28.1
8.9
100.0
-1.70
90
60
30
0
Total Assets: $350bn
________________
1. Based on rating agency reports. MTM losses are based on spread changes from 6/30 to 10/05.
20
>= Mar-10
Financials
Mar-10
Total
Sep-09
A
Mar-09
AA
Sep-08
AAA
Mar-08
Asset Class
120
ABCP
Share of Balance (%)
Buyers of Last Resort : Do Banks have
Enough Balance Sheet
FOMC September Meeting Minutes
“…Given existing commitments to customers and the increased resistance of
investors to purchasing some securitized products, banks might need to take a large
volume of assets onto their balance sheets over coming weeks, including leveraged
loans, asset-backed commercial paper, and some types of mortgages.
Banks' concerns about the implications of rapid growth in their balance sheets for
their capital ratios and for their liquidity, as well as the recent deterioration in various
term funding markets, might well lead banks to tighten the availability of credit to
households and firms…”
1
Banks are significant for credit creation

Banks are significant for Credit creation
– Average growth in US bank financial assets over 2004-06 = $600bn
– Share of bank asset growth in overall (non-financial) credit growth is around 25%

Asset growth at banks had slowed in the first two quarters
Bank asset growth had slowed
Large share of credit creation
40%
12% (Annual Growth)
11%
10%
9%
8%
7%
6%
5%
4%
3%
2001
2002
2003
35%
30%
25%
20%
15%
10%
1983 1986 1989 1992 1995 1998 2001 2004
2004
Domestic Non-Financial Debt
Share of Banks in non-Financial Credit Growth
2005
2006
June
2007
Bank Financial Assets
________________
Source: Flow of Funds Data; Only US Chartered Commercial banks. Left Panel: Share of banks computed as ratio of average 3-year growth
in bank financial assets versus that in domestic non-financial debt. Right panel: y-o-y growth in %
2
Banks are as significant as in the early 1990s

Banks are at least as significant in overall credit creation

By sector
– Less significant in consumer debt
– Slightly less significant in corporate
– More significant in household mortgage debt
Banks are slightly more significant
than in 1990
Less in consumer loans, more in
mortgages
26%
50%
25%
45%
2007, 25%
24%
40%
1990, 23%
23%
% Debt held by Banks
35%
30%
22%
25%
21%
20%
20%
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
1988
1992
1996
2000
2004
Corporate
Bank Financial Assets / Total Non-Financial Debt
Household Non-Mortgage
Household Mortgage
________________
Source: Flow of Funds Left Panel: Ratio of US chartered commercial banks financial assets to total domestic non-financial debt. Right panel:
Proportion of debt owed by various entities which rests on bank balance sheets
11
And have had to take on additional assets

Assets
– HY Bond/Loan pipeline not yet brought to market
– Liquidity puts on ABCP assets

Additional assets and potential losses on these are significant compared with typical
asset growth / earnings
Not trivial
Additional assets & losses
($bn)
Notional ($bn)
Potential Losses
HY Bonds/Loans
120
6
2006 growth in Assets
696
ABCP Assets
85
4
Additional Assets
205
Total
205
10
% of 2006 growth
29%
Financial Assets (June 2007)
7,419
2006 Earnings
91
Potential Losses
10
% of 2006 earnings
11%
________________
Source: Lehman Brothers; Left panel: HY loans/bonds notional estimated using pipeline and league table share of US banks in 2007. ABCP
notional estimated from amount of decline in ABCP and US banks share of liquidity puts. Losses assumed at 5% of notional. Right panel:
financial assets of banks from flow of funds data. Earnings from FDIC.
3
Capital ratios matter for asset growth

Desire to remain better than “adequately capitalized”

Capital Ratios constrained growth in the early 1990s

A 1 pp reduction in capital ratio slowed asset growth by 2.6%
Capital ratios matter for asset growth
Capital/Asset Ratio in end 1989
Loan Growth in 1990-91
Less than 6%
6% - 8%
Small Banks
-2.8
0.6
Large Banks
-8.8
-7.4
________________
Source: Bernanke & Lown, “The Credit Crunch”, Brookings papers on economic activity, 2:1991. . Table is only for New Jersey Banks, 2.6%
figure is for banks nationwide.
6
Large banks are reasonably well capitalized

Focus on Large banks
– They have most of the additional exposure
– Their capital ratios were more affected in the early 1990s

Capital ratios of large banks healthier versus history

Last time we saw a significant deterioration in capital ratios was in 1990-92
Capital ratio for banking system is
lower than averages
But large banks have more healthy
capital ratios
10%
11.0%
9%
10.5%
8%
10.0%
June 2007,
8.28%
9.9%
7%
9.6%
9.5%
6%
9.0%
1992
1994 1996
1998 2000
2002
Average since
1994 - 8.35%
5%
2004 2006
1990 1992 1994 1996 1998 2000 2002 2004 2006
Tier 1 Capital Ratio (Large Banks)
All Banks' Tier1 Capital Ratio
________________
Source: Left panel: FDIC data for all commercial banks. Right panel: Lehman Brothers Equity Research, top 30 banks by assets
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But effect on large banks is still significant

Banks are reasonably well capitalized to begin with, though their ratios have reduced
over the past year

Taking on HY/ABCP assets has two implications for ratios
– Increases the asset base
– Losses from these assets reduce capital

Banks could take additional losses from mortgage exposure
Reasonably well capitalized to begin
with
June 2007 Status
Assets
Equity
Equity/Assets Ratio
Risk Weighted Assets
Tier 1 Capital
Tier 1 Ratio
Additional assets and losses
($bn)
8361
691
8.26%
HY Loans/Bonds
ABCP Assets
Losses @ 5%
Mortgage Losses
Reduction in Capital
5863
486
8.28%
Assets
($bn)
120
85
205
10
15
25
Risk
Weighted
Weight
Assets
100%
120
20%
17
137
________________
Source: Left panel: Lehman Brothers equity research, top 30 banks by assets; Right panel: HY loans/bonds notional estimated using pipeline
and league table share of US banks in 2007. ABCP notional estimated from amount of decline in ABCP and US banks share of liquidity puts.
Losses assumed at 5% of notional. Potential losses from mortgage assets as estimated by the Mortgage Strategy group under a -12% HPA
scenario.
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And could reduce asset growth appreciably

Banks would like tier-1 ratio to remain above 7.5 - 8%

Immediate deterioration in ratios is significant, but not catastrophic

No need to sell assets immediately; more likely a slowing in future asset growth

To maintain ratios at 8%, a $250 billion reduction in asset growth is necessary
Immediate deterioration in ratios is
significant
Increased Assets
Equity
Equity/Assets Ratio
Deterioration in Ratio
Increased Risk Weighted Assets
Tier 1 Capital
Tier 1 Ratio
Deterioration in Ratio
And could entail a large reduction in
asset growth
8566 bn
666 bn
7.77%
-0.49%
6000 bn
460 bn
7.67%
-0.61%
Forecast Asset Growth for 2008
Reduction in Asset Growth Necessary to
maintain 8% ratio
Proportion of Projected Growth
685 bn
36%
Forecasted Asset Growth (%)
Constrained Asset Growth (%)
Reduction in Asset Growth
Reduction in Asset Growth (early 90s)
7.7%
4.9%
2.8%
3.7%
246 bn
________________
Source: Lehman Brothers, Lehman Brothers Equity Research. Assets/capital as of June 2007 for top 30 banks. Forecast asset growth at 7.7%
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