RATINGS RATIONALE

Moody's said that the downgrade to Baa2 was caused by the following factors: (i) The greater pressure on its core revenue source, realisations of its (predominantly private) equity investments, stemming both from an adverse operating environment for many of these primarily UK and European-based companies, as well as a more muted investor appetite impacting realisation chances; Moody's considers that 3i continues to face significant headwinds given the weakening economic environment in Europe where the firm maintained 76% of its portfolio investments at the end of March 2012, and further pressure on the net asset value of the firm's investments, which could have, among others, a negative effect on its leverage metrics; (ii) greater uncertainty whether 3i will succeed generating sufficient cash flows from management fees following a strategic rebalancing towards asset management, to cover its operating expenses; moreover, management faces significant challenges both integrating and further developing its recent debt management acquisitions and retaining key personnel (iii) a decreased granularity and diversification of 3i's private equity and investment portfolios as the company focuses on fewer core assets, and the number of core Private Equity (Buyouts & Growth) portfolio companies reduced from 208 in March 2008 to 90 in March 2012; (iv) a rebalancing towards a more shareholder-oriented financial policy, with a commitment to a minimum dividend payment distribution of 8.1 p (GBP 76 million at current shares outstanding), which will put additional pressure on the company's cash requirements.

The downgrade has been limited to one notch, and the outlook now is stable, based on the following factors that at least partly mitigate some of the above negative rating pressures: (i) the announcement of a significant cost-reduction programme, which is expected to reduce operating cost by GBP45 million per year after March 2014 (GBP40 million by March 2013 with GBP30 million one-off implementation costs); (ii) the financial policy which in Moody's view also protects bondholders' interests since dividends beyond the minimum distribution, representing between 15% and 20% of realisations, will only be distributed if gearing remains below 20% and its gross debt is "on target" to be below GBP1 billion by June 2013 (GBP1.3 billion at the end of June 2012), all of which underpin the stable outlook on the new Baa2 ratings; (iii) the positive steps 3i has taken to diversify its source of income, enhancing its debt management business following the acquisition of Invesco's European CLO business and its strategic transaction with WCAS Fraser Sullivan Investment Management, LLC. Once the transaction is completed, it will increase 3i's assets under management to GBP13.5 from GBP 10.5 billion at the end of March 2012. Nevertheless, 3i's has still to demonstrate its ability to grow organically its debt management business, control costs, and consolidate its performance fees from the new CLO funds in order to generate sustainable profits from this business; (iv) the company's solid liquidity management, with extended debt maturities and significant committed liquidity facilities well in excess of short-term cash requirements; (v) the company's limited exposure to peripheral European countries, primarily Spain, at 6% of its total direct portfolio investments

WHAT COULD CHANGE THE RATING UP

A more liquid investment portfolio, a track record demonstrating adherence to its new gearing and leverage targets even in volatile and unfavourable times, accompanied by greater efficiency and more balance contribution from its debt management business.

WHAT COULD CHANGE THE RATING DOWN

A downgrade could result from a significant deterioration on its leverage metrics with the company missing its gearing and gross debt targets for more than one quarter. In addition, downward pressure could come from a relaxation in the liquidity strategy or a considerable reduction in the portfolio diversification.

The principal methodology used in this rating was Global Investment Holding Companies published in October 2007. 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 rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

Information sources used to prepare the rating are the following : parties involved in the ratings, and public information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating 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 entity or its 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.

Carlos Suarez DuarteAsst Vice President - Analyst Financial Institutions Group Moody'sInvestors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Johannes Wassenberg MD - Banking Financial Institutions 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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