<nobr>Nov 3, 2003</nobr>

Composite Corporate Bond Rate Proposal by ERIC (thru 12/31/03)

Attached are charts depicting actual and projected 1/1/2004 rates for a composite corporate bond rate to replace the mandated 30-year Treasury bond rate. A corporate rate has been included in legislation approved by the House (H.R.3108), the Senate Finance Committee and the Senate Committee on Health, Education, Labor, and Pensions.

On August 22, 2002, ERIC proposed that Congress replace the defunct 30-year Treasury bond rate with a composite corporate bond rate for purposes of pension regulation. ERIC's composite rate would be the arithmetic average of indices of high quality, long duration corporate bonds (generally AAA and AA quality level bonds). The indices would be published by established financial services firms and based on publicly disclosed methodologies. The rates in the attached charts are calculated using four indices that meet these qualifications: Moody's Aa Long Term Corporate Bond Index, Merrill Lynch 10+ High Quality Index, Citigroup High-Grade Corporate Index, and Lehman Brothers Aa Long Credit Index.

Text Files:

Click Here to View Composite Rates Projected to 12/31/03

Click Here to View Graph of 30 Year Treasury Bond thru 9/30/03 for PBGC

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