Dexia: Exposure To U.S. Subprime Mkt Remains Well Protected

PARIS (Dow Jones)--French-Belgian bank Dexia SA (DEXB.BT) said Monday itsexposure to U.S. subprime residential mortgage assets remains "very wellprotected" and would not cause any losses, even in the case of further marketdeterioration.

Dexia is primarily exposed to the U.S. subprime market through its localholding Financial Security Assurance Inc., or FSA, a bond insurer.

"Having looked closely at the group's current exposures, we are confident that Dexia's subprime residential assets benefit from a high level of protection andwould not cause any losses, even in case of further deterioration of subprimedebtors' expected default rates," Dexia's Chief Risk Officer Claude Piret said.

Dexia was the second French banking group, after Natixis (12068.FR), to issuea statement Monday to assuage investor fears that it holds significant exposureto the U.S. subprime market.

Dexia also said that current market circumstances "provide opportunities forattractive business at an adequate level of pricing so as to reward the risksand yield attractive returns on capital.

FSA said in the same statement that it was in a position "with no materialexposure to multi-sector collateralized debt obligation, including those withsubprime exposure."

Dexia shares closed 2.9% higher at EUR20.54 in an overall negative market.

Company Web site: http://www.dexia.com

-By Nicolas Parasie, Dow Jones Newswires; nicolas.parasie@dowjones.com; +33 140 17 1770

(END) Dow Jones Newswires 08-06-07 1154ET Copyright (c) 2007 Dow Jones & Company, Inc.