Green Mortgage Backed Securities (MBS)

MTS is comprised of leading environmental groups, governments & companies.

It uses high leverage activities to achieve 90% sustainable products market penetration by 2015:

- Capital markets - Education - Advertising - Standards

A nonprofit public charity

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Phase I Property Condition LEED Green Power

Successful Precedent

Phase 1 & Property Condition Assessment (PCA)Resulted in 95% US Market Penetration in 3-5 Yrs.

Phase 1 and PCA were mandated

by Rating Agenciesfor all mortgage backed

securities

Phase 1Growth

PCAGrowth

LEED Green Building Growth

Green MBS Recommended

By leading investment bank/MTS to S&P 10/13. Investors

surveyed, & needed operational product expected in 12/07

Economic Benefits ProjectedProjected 70% US Commercial Green 70% US Commercial Green

Building Market PenetrationBuilding Market Penetration**

Energy Savings & Daylighting:              Energy Savings & Daylighting:              $36 $36 Billion/yrBillion/yrConstruction Waste Reduction:           Construction Waste Reduction:           $6.7 B/yr $6.7 B/yr Water Pollution Savings from Water Conservation:    $20 B/yrWater Pollution Savings from Water Conservation:    $20 B/yrEnergy Savings from appliances & Lighting:               $24 B/yrEnergy Savings from appliances & Lighting:               $24 B/yrAdded Value from Increased Occupant Productivity Added Value from Increased Occupant Productivity

(5%), IAQ & Reduced Absenteeism:              $632 B/yr(5%), IAQ & Reduced Absenteeism:              $632 B/yr

Health Care Savings Health Care Savings $75 B/yr $75 B/yr

Emission Reductions’ Market Value:Emission Reductions’ Market Value: $ 1.1 B/yr$ 1.1 B/yr

Total                                     Total                                      $795 Billion/yr value $795 Billion/yr value addedadded

Green Retail Buildings Will Also Accrue Increased Retail SalesGreen Retail Buildings Will Also Accrue Increased Retail Sales   

* Leonardo Academy & MTS Projections 2003 & Surgeon General 2006* Leonardo Academy & MTS Projections 2003 & Surgeon General 2006

ElectricityTransportation

Heating

Allocation of 6.2 GtC/yr

Electricity: 40%Fuels used directly: 60%

Substantial Global Carbon Reduction Needed in 5-10 yrs to Enhance Economy, Energy Security & Stop Irreversible

Dangerous Climate ChangeFossil fuel use in 2000 (IEA)

Allocation of 6.2 GtC/yr

Wall Street Products for green buildings & power, sustainable products, clean vehicles & mass transit, will reduce the needed 3.7GtC/yr in 5-10 yrs. w / necessary margin of safety.

Green MBS Added ValueBuildings owners/developers achieve lower

costs, higher asset value, more productive work environments & possibly a lower cost of capital via mortgage rate.

Investment bankers achieve value through profit & differentiation surrounding structure & distribution of Green MBS pool.

Ratings agencies reduce risks of Green MBS pool & receive commission.

Investors purchase Green MBS backed by assets that are worth more, viewed as less risky, & more closely aligned with investor goals of purchasing sustainable assets.

LEED EB CERTIFIEDLEED EB CERTIFIEDNational Geographic National Geographic

SocietySocietyHeadquarters, Wash., Headquarters, Wash.,

DCDCThe Society added $16M in value from this LEED certification from a higher appraised value, raising tenant rents, lower operating costs, increased credit rating from Moody’s, & lower interest rates on large loans secured to the building. Presentation at 2003 Congressional Green Building Luncheon by Chris Liedel, CFO, National Geographic Society.

MTS Green Building Value Rating System©

Real estate value is a combination of cash flow, timing and risk. Green buildings positively affect all three of these metrics.

The Greatest Qualitative & Quantitative Value Exists for:

1. Mold protection (VERY HIGH: 26, adjusted total score)

2. Reduced energy use and exposure to future energy pricing volatility (VERY HIGH: 25)

  3. Reduced climate risk (VERY HIGH: 24)

  4. Commissioning/Operational risk (HIGH: 17)

  5. Improved indoor air quality and health (HIGH: 17)

6. Lower operating costs and default risk (HIGH: 17)

7. Improved tenant productivity, comfort & a corresponding increase in rents (MEDIUM: 11)

Basis of Wall Street / MTS Initiation of Green MBS

Value Rating System

Greatest Green Building Risk Reduction (in order):

1. Decreased dollar risks over time

  2. Reduced large dollar risks

  3.   Increased collateral value / reduced obsolescence risk

  4.   Reduced default risk from no or diminished insurance coverage

  5.   Reduced liability risk