WASHINGTON Moody's Investors Service said yesterday that it has prospectively assigned its highest rating for counterparty risk to Credit Lyonnais' derivatives program.

The rating agency said this is the first time it has given a separate rating to a derivatives program within a bank.

While Credit Lyonnais' derivatives program has a prospective rating of Aaa, the bank as a whole has an A rating.

The higher derivatives program rating will allow Credit Lyonnais to trade with more counterparties, said William May, a senior analyst in the rating agency's structured finance group.

"The rating gives Credit Lyonnais more access to more customers than it would otherwise have," May said. Often, counterparties can do business only with entities having the highest rating.

Under the bank's derivatives program, counterparties will do business directly with Credit Lyonnais' New York branch.

A reason for the derivatives program's higher rating is that its transactions will be guaranteed by CLFG Corp, an affiliate of a triple- A rated financial insurer, Financial Securities Assurance.

Moody's said the derivatives program will be backed by the global resources of Credit Lyonnais, collateral posted by the bank's New York branch, a $200 million policy from Financial Securities AsSurance, and receivables from guaranteed counterparties that have net payable positions with respect to the New York branch.

Counterparties using the program will rely on documentation that clearly distinguishes guaranteed from nonguaranteed trades, Moody's said. At the outset, the transactions covered by the program will be limited to interest-rate and foreign-exchange derivatives, which encompass all of the bank's derivatives activity, Moody's said.

May said Credit Lyonnais' move to establish a separately rated derivatives program will probably set a new trend in the industry. However, he doubted there would be anymore programs established this year.

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