Amsterdam, 12 November 2008- International investment company Kardan N.V. (Kardan) announces that Maalot, the Israeli subsidiary of Standard & Poor’s, reported today that it has decided to decrease the rating of the debentures issued by Kardan in 2007 to A- outlook negative.

In its report, the rating committee explained that as a result of a slow down of the economy in the geographical areas Kardan is active in, it decided to downgrade the rating of the (non convertible) debentures of Kardan from AA- to A-, negative outlook. In addition Maalot mentions the increased loan to value, which is currently 40% compared to 25% at the moment of the initial rating. Furthermore Maalot is of the opinion that the new rating reflects the strong liquidity position of Kardan.

The principal of the non convertible debentures amounts to NIS 1,190 million (approximately EUR 211 million) and will be repaid in four equal instalments during the years 2013 to 2016.

At the same time, the rating of the non-convertible debentures of GTC RE was changed from AA- into A-, stable outlook. These debentures with a principal amount of NIS 1,334 million (approximately EUR 254 million) were also issued in 2007. They will be repaid between 2014 and 2020 in seven equal instalments.

According to the management of Kardan the downgrade of the rating does not have a significant impact on its financial covenants.

As previously announced, Kardan and GTC RE are in the process to merge GTC RE into Kardan to create a larger holding with a strengthened financial and equity position. In its report issued today, Maalot mentioned that the intended merger does not have a negative impact on the rating. It mentions also that after the merger the ratio of unpledged assets to secured debt improves. It is anticipated that the shareholders meeting to approve the merger will be held in the first half of December 2008.

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