Dexia raises EUR 6.4 billion from the Governments of Belgium, France and Luxembourg and from existing shareholders

Today the authorities of Belgium and France, together with existing shareholders, announce that they have subscribed for an increase of the capital of Dexia at a price per share equal to the average of the closing prices of the Dexia share over the last 30 calendar days, i.e. EUR 9.90.

In addition, the Government of Luxembourg will subscribe for newly-issued convertible bonds for a total amount of EUR 376 million.

EUR 6.4 billion of capital will secure a strong solvency for the Group Due to the significant deterioration in the business and market environment and the financial distress of a number of financial services companies, Dexia made a careful assessment of its situation and decided to take decisive action and raise EUR 6.4 billion of capital.

Dexia expects its Tier 1 capital ratio at the end of September 2008, before the capital increase, to be above 10%.

The EUR 6.4 billion capital injection will allow Dexia to remain one of the better capitalized banks in Europe even when accounting for potential negative impacts that could arise from:

- Unprecedented market volatility creating potential impacts on marked-to-market securities and risk-weighted assets - Overall deterioration in the creditworthiness of some banking counterparties - Further impairments on equity portfolios - Further deterioration in FSA Insured and Financial Products portfolios

Dexia is finalizing the terms and conditions of its support to FSA’s Financial Products business line In order to continue providing support to FSA’s Financial Products liquidity whilst preserving Dexia’s position and limiting its exposure, it has been decided that Dexia’s USD 5 billion unsecured liquidity line granted to FSA’s Financial Products asset management subsidiary would be converted into an equally sized repo facility hence significantly reducing the risk profile of this facility.

In taking the credit risk responsibility, Dexia has also decided that economic losses at FSA’s Financial Products asset management subsidiary exceeding the USD 316 million recognized at the end of June 2008 would be compensated by capital injections into this subsidiary that shall under no circumstances exceed USD 500 million. Within that limit, the capital increases will match the amount of additional economic losses net of US corporate tax if and when they occur.

This measure will contribute to the liquidity of the Financial Products portfolios. This will allow to avoid divestments at distressed prices whilst capping Dexia’s support and limiting its downside exposure.

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