Liquidity management Short Term The day-to-day operation of your business often results in cash flow surpluses.

ING offers you various arrangements to invest these funds short term: Term Accounts Money Market Funds Commercial Papers Treasury Certificates Certificates of Deposit Long term If you are looking for long term solutions for investing your spare cash, then you should find out about our range of: Bonds Equity derivatives Structured Products Mutual Funds Term accounts Definition A Term Account is a savings account where money is deposited for a specified period (the "term"). Usually, that term is short. Fourteen days, a month, a quarter or half-year, and sometimes even one year. Charges Unlike an ordinary savings account, Term Accounts give you a guaranteed interest rate throughout the duration of the investment. The interest, which usually rises with the term and the amount invested, is mainly determined by the market interest rate, and is therefore subject to fluctuations. Deposits are held until maturity, and there is no secondary market. In principle, the interest is paid on the maturity date. Advantages Guaranteed interest Interest rate that fluctuates with market interest rates Flexibility as far as term is concerned Money market funds Definition These are open-ended funds operated by an investment company, which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Underlying assets are short term money market instruments. Benefits include diversification and professional money management. Shares are issued and redeemed on demand, based on the fund's net asset value that is determined at the end of each trading session. The increase of the net asset value between the subscription date and the redemption date gives the return of the investment. Commercial papers General Information Commercial Paper is short term debt (<365 days) in the form of negotiable, bearer promissory notes issued for set maturities, at discount in the Euro market through sole or selected dealership, with no directly related underwriting commitment. A Commercial Paper programmers enables an issuer, with a bank acting as the intermediary, to continually issue debt instruments with money market maturities. Interest is usually calculated on a discount basis. This means that the investor pays the principal less the interest, the so-called discount price. As the commercial paper reaches maturity, the initial amount will accrue to the principal (nominal amount).

The issuers credit rating is an essential requirement to become a professional borrower in the Euro commercial paper market and plays a key role in determining the pricing. The companys country of origin and business may also influence it. In the European Monetary Union, most commercial paper programmers tend to be international. However, certain European domestic programmers remain attractive due to differences in their countries legal and tax environments. Benefits for Investors Higher returns: as the investor negotiates with the issuer, using a bank as an intermediary, it can be possible to obtain a higher return on their cash surpluses than through bank deposits. The investors credit risk is the issuer since unlike bills, for example, the bank acts as dealer not as guarantor. Diversification: Securities like commercial paper provide another alternative for investing cash surpluses and diversifying investment portfolios. Increasingly, financial institutions and corporate are investing these surpluses in commercial paper with a pre-determined acceptable credit rating. For investors who traditionally invest in fixed-rate assets (term deposits and treasury bonds), commercial paper also allows them to diversify their portfolios without carrying out extensive credit analyses. Thanks to the wide range of maturity dates and issuers, each investor can find an investment that suits their desired risk profile. Liquidity, flexibility, simplicity: integration of Europes commercial paper markets is making this instrument increasingly liquid. The range of issues available also enables investors to select commercial paper to suit their cash flow and other requirements. Standardized documentation also simplifies the whole process. CP is quoted as a yield so can be directly compared to term deposits, or certificates of deposit. Treasury certificates Definition Treasury Certificates are short term bills issued by the Treasury. Treasury Certificates are issued at regular intervals with various maturities. Return On subscription or purchase, you pay a discounted amount, and on the maturity date, you receive the nominal amount. Advantages Return is higher than on term accounts No issuer risk (state guarantee) Certificates of deposit Definition A Certificate of Deposit (CD) is a short term monetary promissory note, issued by a financial institution for a period ranging from 1 week to 364 days. You can actually consider Certificates of Deposit as Commercial Paper, issued by a financial institution. Return On subscription or purchase, you pay a discounted amount, and on the maturity date, you receive the nominal amount. Advantages Availability from various financial institutions, without the need to hold an account with the financial institution concerned Negotiability Bonds Definition A bond is a certificate of debt (usually interest-bearing or discounted) that is issued by a government, a corporate or a financial institution company in order to raise money. A bond will pay a fixed or variable amount of interest at regular interval over a certain period of time. The

nominal amount is intended to be reimbursed totally (or partially) at the end of the period. Partially or earlier redemption is possible depending on derivatives (call/put) that can be added. Two features of a bond credit and duration are the principal determinants of a bonds interest rate. The credit quality informs investors on the credit worthiness (or risk of default) of the issuer. Usually, credit quality is determined by private independent rating agencies such as Standard & Poors or Moodys. The quotes given vary from high (AAA to AA), to medium (A to BBB) to low (BB to C). When the rating is high, the bond is classified as Investment grade in opposition with High Yield or Junk which is used for lower rating bonds. Bonds issued by government are not subject to credit rating as they are considered to be of the very highest quality. Equity derivatives Definition Equity derivatives are a class of financial instruments whose value is based on the evolution of the underlying cash securities - stocks and stock indices. The most common instruments used are options, futures and swaps. Standardized maturity dates, sizes and strike prices can be traded directly on regulated exchanges. However, equity derivatives can also be traded "over-the-counter" - directly with ING. Investors can use equity derivatives to achieve different goals: Buying stock at a reduced cost or selling at a premium Create a synthetic exposure on shares not held Yield enhancement Portfolio diversification We develop some basic techniques in our booklet "Liquidity management and equity derivatives". As the possibilities are almost infinite and will depend on your goals and situation, our specialists are at your disposal for further information. Equity derivatives @ ING Teams of highly skilled specialists Present all over the world Following single stock and index underlying in developed and emerging markets Active in both plain vanilla and exotic pay-off structures Providing tailor made solutions to client groups such as asset managers, banks, financial intermediaries and institutional clients Structured Products General information Risk profile Underlying value Structured Products @ ING General information Structured Products is the generic term for a wide range of financial instruments. Structured Products are a combination of different securities, mostly a combination of bond and option components. The price of a Structured Product is always the sum of its different components at a certain moment in time; price shifts are thus caused by movements in the value of each component. Structured Products often offer deviant risk-yield characteristics when compared to plain vanilla investment products. Structured Products are ideal products to offer a leveraged pay-off based on a particular market view. In addition, a Structured Product can offer you access to markets that may otherwise be difficult to access. Over the years, ING has issued an impressive range of Structured Products with innovative concepts being introduced on a regular basis. The Structured Products offered by ING may vary in risk profile, underlying value, term to maturity, etc. In order to assess which

Structured Products may be suitable for you, ING applies two criteria: the risk profile & the underlying value. Those criterias are explained further in the next chapters. Risk profile Some Structured Products have as a goal the protection against a fall in stock prices, while others combine a high risk with a potentially high return. The Structured Products issued by ING are subdivided in three categories: Protection Structured Products that have a capital protection of at least 100% at maturity. In addition, the issue price of these products can be 102% at maximum. Should the underlying value perform badly, your maximum loss will thus be 2% of the invested capital. Limited Risk Structured Products with a limited downward risk at maturity on the capital invested. The capital protected lies below the capital invested. Should the underlying value perform badly, you may lose only a part of your invested capital. High Risk Structured Products with a relatively high risk at maturity. These products have no capital protection at maturity or only one which lies well under the capital invested. Should this product perform badly, you may lose the whole or a big portion of your capital invested. Underlying value Structured Products provide access to a large number of financial markets. The investment, to which the yield of the Structured Product is linked, is referred to as the underlying value. ING Structured Products are subdivided into three types of underlying values: Equity Structured Products where the yield is linked to a stock index, a fund investing in stocks, individual shares or a combination thereof. Interest Structured Products where the yield is linked to an interest rate curve, a bond index, a fund investing in bonds, individual bond issues or a combination thereof. Other Structured Products where the yield is linked to alternative underlying values; e.g. commodities, currencies, real estate, inflation etc. Products where the yield is function of different asset classes also fall into this category. Mutual funds These are open-ended funds operated by an investment company, which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Benefits include diversification and professional money management. Shares are issued and redeemed on demand, based on the fund's net asset value that is determined at the end of each trading session.