Acquisition of Series 3 Class-B Preferred Shares in Lump by Shinsei Bank

News Release

Date: August 1, 2007

This is to announce that pursuant to the provisions of the Articles of Incorporation of Shinsei Bank, Limited (“Shinsei Bank”), Series 3 Class-B Preferred Shares issued by Shinsei Bank and owned entirely by the Resolution and Collection Corporation (“RCC”) as stipulated in the Law Concerning Emergency Measures for Early Strengthening of Financial Functions, Shinsei Bank today acquired all relevant preferred shares and issued the bank's common shares in exchange to the RCC, as follows:

Name of shares acquired in lump Shinsei Bank Series 3
Class-B Preferred Shares
   Amount (A) ¥120.0 billion
 Number of shares owned 300,000,000 shares
 Paid-up value per share ¥400
Exchange price per share for acquisition of relevant
preferred shares in lump
¥600(Note)
Name of shares issued Shinsei Bank common shares
  Number of shares issued (B) 200,000,000 shares
(Note)
1. Shinsei Bank's Articles of Incorporation provide the calculation method of exchange price for the acquisition of preferred shares in lump and the upper limit of common shares issued in exchange, as follows:
- Exchange price for the acquisition shall be the average of common share prices at the closing for the period from 45 trading days to 30 trading days prior to the date when Shinsei Bank acquires all the preferred shares (C).
- However, the upper limit shall be two-thirds of common share for one preferred share (300,000,000 preferred shares × 2/3 = 200,000,000 common shares).
2. Regarding the relevant preferred shares, the exchange price calculated using the method mentioned above results in the number of common shares issued in exchange exceeding the upper limit. Thus, ¥600 calculated using 200,000,000 {(A)/(B)} shares, the upper limit of shares mentioned above, shall be the exchange price.

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