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CMET Holdings Launches New Trading Platform

New York, NY, January 8, 2004 - CMET Holdings LLC ("CMET"), a private firm specializing in creating capital-efficient platforms for capital markets trading businesses, and XL Financial Solutions ("XLFS"), the alternative risk transfer group of XL Capital Ltd (NYSE: XL), announced the launch of CMET's initial trading platform with the closing of a $100 million equity offering of CMET Finance Holdings Inc. ("CMET Finance"), privately placed by FBR & Co, a subsidiary of FBR Group. Inc. (NYSE: FBR). The proceeds of the offering will be, in part, applied towards the capitalization of two newly established broker- dealer subsidiaries of CMET Finance, to be managed by its subsidiary CMET LLC.
The first such broker-dealer, Three Rivers Securities LLC ("TRS"), has already commenced operations with a "AAA/Aaa" counterparty rating from both Standard & Poor's and Moody's rating agencies.
XLFS structured a $260 million financing for TRS with significant support from Allianz Risk Transfer (Bermuda) Limited relating to the credit enhancement. Certain operational functions of TRS, including trade operations, reconciliation, accounting and clearance services will be outsourced to The Bank of New York.
James Tabacchi, CEO of CMET and CMET Finance, commented: "TRS is the culmination of an innovative concept created several years ago. We are very proud of this financial, operational and systems technology that has the ability to revolutionize the way trading businesses are set up and run in the capital markets arena. We are especially glad to have had XLFS share our vision and work along with us as a partner in developing this structure."
Daniel L. Sussman, CEO of XLFS, said: "We are delighted to have participated with CMET in the design of this innovative trading platform. We are confident that the combination of CMET's trading acumen with XL's structuring expertise and risk capital commitment will result in a successful business venture."
TRS will run a $15 billion repurchase ("repo") matched-book of US Government and Agency collateral. The US Government repo market is a $4 trillion market and a key component of the US money markets. The repo market is one of the principal mechanisms through which the Federal Reserve implements monetary policy.
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This press release contains forward-looking statements. Such statements are based on current plans, estimates and expectations. Accordingly, forward-looking statements involve inherent risks and uncertainties, and a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement, including, without limitation, that CMET's business platform may not develop to the extent anticipated. There is no duty to publicly update or revise any forward-looking statements contained herein in light of new information, future developments or otherwise.

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