RATINGS RATIONALE

On 6 December 2012, Moody's took rating actions on five Norwegian saving banks. Specifically, Moody's will review for possible downgrade the long-term senior debt and deposit ratings of the four rated banks in the SpareBank 1 alliance (SpareBank 1 SMN, SpareBank 1 SR-Bank, SpareBank 1 Nord-Norge and Sparebanken Hedmark). Moody's expects that the banks' debt ratings may be lowered by up to one notch. For further details, please refer to the press release "Moody's concludes the review on the ratings of five Norwegian savings banks".

A downgrade of any of the four member banks of the SpareBank 1 alliance would negatively impact the credit strength of SpareBank 1 Naeringskreditt AS, the covered bond issuer, to which Moody's has assigned a private monitored rating. The Timely Payment Indicator (TPI) assigned to these bonds backed by commercial property financings is "Probable" and Moody's TPI framework would constrain the covered bond ratings to A1 in case the issuer rating is downgraded.

Moody's has affirmed the Aaa ratings of the residential covered bonds issued by SpareBank 1 Boligkreditt AS and More Boligkreditt, because in both cases the TPI framework (TPI: "High") does not constrain the covered bond ratings. Moody's expects that the issuers will provide OC in committed form, in due course.

The ratings assigned by Moody's address the expected loss posed to investors. Moody's ratings address only the credit risks associated with the transactions. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors.

KEY RATING ASSUMPTIONS/FACTORS

Covered bond ratings are determined after applying a two-step process: an expected loss analysis and a TPI framework analysis.

EXPECTED LOSS: Moody's determines a rating based on the expected loss on the bond. The primary model used is Moody's Covered Bond Model (COBOL), which determines expected loss as (1) a function of the issuer's probability of default (measured by the issuer's rating); and (2) the stressed losses on the cover pool assets following issuer default.

COVER POOL LOSSES AND OVER-COLLATERALISATION

For each covered bond programme below, the cover pool losses are an estimate of the losses Moody's currently models if the relevant issuer defaults. Cover pool losses can be split between market risk and collateral risk. Market risk measures losses as a result of refinancing risk and risks related to interest-rate and currency mismatches (these losses may also include certain legal risks). Collateral risk measures losses resulting directly from the credit quality of the assets in the cover pool. Collateral risk is derived from the collateral score.

--- SpareBank 1 Naeringskreditt AS covered bonds

The cover pool losses are 30.6%, with market risk of 19.1% and collateral risk of 11.5%. The collateral score for this programme is currently 17.1%. The over-collateralisation (OC) in this cover pool is 29.8%, of which the issuer currently provides 15.5% on a "committed" basis. The minimum OC level that is consistent with the Aa3 covered bond rating target is 19.5%. Moody's will determine the amount of committed OC as part of its rating review.

--- SpareBank 1 Boligkreditt AS covered bonds

The cover pool losses are 10.9%, with market risk of 7.6% and collateral risk of 3.4%. The collateral score for this programme is currently 5.0%. The OC in this cover pool is 9.3%, of which the issuer currently provides 0.0% on a "committed" basis. The minimum OC level that is consistent with the Aaa covered bond rating target is 8.5%. Moody's expects that the issuer will provide 9.5% OC in committed form, in due course.

--- More Boligkreditt covered bonds

The cover pool losses are 10.0%, with market risk of 5.9% and collateral risk of 4.1%. The collateral score for this programme is currently 6.1%. The OC in this cover pool is 13.5%, of which the issuer currently provides 0.0% on a "committed" basis. The minimum OC level that is consistent with the Aaa covered bond rating target is 7.5%. Moody's expects that the issuer will provide 8.5% OC in committed form, in due course.

For further details on cover pool losses, collateral risk, market risk, collateral score and TPI Leeway across covered bond programmes rated by Moody's please refer to "Moody's EMEA Covered Bonds Monitoring Overview", published quarterly. All numbers in this section are based on the most recent Performance Overviews, which are based on Moody's most recent modelling based on data, as of 30 September 2012.

TPI FRAMEWORK: Moody's assigns a "timely payment indicator" (TPI), which indicates the likelihood that timely payment will be made to covered bondholders following issuer default. The effect of the TPI framework is to limit the covered bond rating to a certain number of notches above the issuer's rating.

SENSITIVITY ANALYSIS

The robustness of a covered bond rating largely depends on the issuer's credit strength. The TPI Leeway measures the number of notches by which the issuer's rating may be downgraded before the covered bonds are downgraded under the TPI framework.

--- SpareBank 1 Naeringskreditt AS covered bonds

The TPI assigned to this programme is "Probable", the TPI Leeway is unpublished.

--- SpareBank 1 Boligkreditt AS covered bonds

The TPI assigned to this programme is "High", the TPI Leeway is one notch.

--- More Boligkreditt covered bonds

The TPI assigned to this programme is "High", the TPI Leeway is one notch.

A multiple-notch downgrade of the covered bonds might occur in certain limited circumstances, such as (1) a sovereign downgrade negatively affecting both the issuer's senior unsecured rating and the TPI; (2) a multiple-notch downgrade of the issuer; or (3) a material reduction of the value of the cover pool.

On 21 August 2012, Moody's released a Request for Comment seeking market feedback on proposed adjustments to its modelling assumptions. These adjustments are designed to account for the impact of rapid and significant country credit deterioration on structured finance transactions. If the adjusted approach is implemented as proposed, the rating of the notes affected by today rating action may be negatively affected. See "Approach to Assessing the Impact of a Rapid Country Credit Deterioration on Structured Finance Transactions", (http://www.moodys.com/research/Approach-to-Assessing-the-Impact-of-a-Rapid-Country-Credit--PBS_SF294880) for further details regarding the implications of the proposed methodology changes on Moody's ratings.

RATING METHODOLOGY

The principal methodology used in these ratings was "Moody's Approach to Rating Covered Bonds" published in July 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The ratings have been disclosed to the rated entities or their designated agent(s) and issued with no amendment resulting from that disclosure.

Information sources used to prepare each of the ratings are the following: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entities, obligations or credits satisfactory for the purposes of issuing this review.

Moody's adopts all necessary measures so that the information it uses in assigning the ratings is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Moody's Investors Service may have provided Ancillary or Other Permissible Service(s) to the rated entities or their related third parties within the two years preceding the credit rating action. Please see the special report "Ancillary or other permissible services provided to entities rated by MIS's EU credit rating agencies" on the ratings disclosure page on our website www.moodys.com for further information.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Alexander Zeidler Vice President - Senior Analyst Structured Finance Group Moody'sInvestors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Juan Pablo Soriano MD - Structured Finance Structured Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Investors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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