On Jan. 17, 2005, Standard&Poor's Ratings Services assigned its 'A-' long-term and 'A-2' short-term counterparty credit ratings to Banco Espirito Santo de Investimento, S.A. (BESI), the investment-banking unit of Portuguese Banco Espirito Santo S.A. (BES, A-/Stable/A-2). The ratings are underpinned by BESI's full ownership by and integration within BES. They also benefit from BESI's strong position in investment banking in Portugal, sound stand-alone capitalization, and adequate asset quality. Counterbalancing these factors are BESI's predominantly market-related revenue base (which introduces volatility risk into returns); meaningful credit exposure (relative to core capital) to inherently riskier Brazilian debtors, mainly through its majority-owned Brazilian subsidiary; and high risk concentration (relative to core capital) in the biggest borrowers. BESI's core status within the
