RATINGS RATIONALE

"Our upgrade of OYAK's rating to Ba1 was triggered by the upgrade of the sovereign rating of the Government of Turkey to Ba1 and OYAK's strong fundamental credit profile," says Martin Kohlhase, a Moody's Vice President -- Senior Analyst and lead analyst for OYAK. Moody's has implicitly capped OYAK's rating at the same level as that of the rating of the Government of Turkey.

Moody's notes that OYAK has strong links with the Turkish economy as its assets are almost exclusively based in Turkey. Moreover, those companies in which OYAK has invested also have significant exposure to the domestic economy. The pension fund's investments should therefore benefit from the increased resilience of the country's public finances. OYAK's high regional asset concentration is partially offset by the fund's wide industry diversification.

Core to OYAK's creditworthiness is its strong financial profile: the pension fund does not have on-balance-sheet debt and has access to substantial cash (TL5.8 billion, or approximately USD3 billion, as of fiscal year-end 2011 (FYE 2011), a result of which is very strong liquidity (adjusted liquidity ratio at 59.2x as of FYE 2011) and cash coverage ratios (40x). Given that OYAK had a market-value leverage (MVL) in the mid-20s in percentage terms as of FYE 2011, Moody's considers that the value of the portfolio could withstand a moderate degree of volatility within an MVL band of 25%-30% without this weakening the Ba1 rating.

The Ba1 rating assumes that (i) OYAK will maintain its current financial profile; and (ii) management will continue to prudently invest members' funds and provide them with a minimum technical return of 5% per annum -- a benchmark that the fund has met for at least the past 10 years.

The stable outlook reflects that, even in the event of a further upgrade of the sovereign rating of Turkey -- which carries a positive outlook -- Moody's would not necessarily further upgrade OYAK's rating in line with this.

WHAT COULD CHANGE THE RATING UP/DOWN

For Moody's to consider upgrading OYAK's ratings to the investment-grade category, the pension fund's MVL would have to remain below 25% on a sustainable basis, its cash coverage above 3.0x and its technical return to members at a minimum of 5%. An upgrade would likely be limited by the level of Turkey's own rating. Moody's notes that large-scale investments could limit future upgrade potential, depending on the funding structure as well as expected returns. However, if OYAK were to undertake an investment that would use a large portion of its cash balance, Moody's would expect the pension fund to have adequate back-stop facilities in place to ensure a continued strong liquidity profile.

Conversely, Moody's could downgrade OYAK's rating to Ba2 if the pension fund's MVL increased above 30%.

The principal methodology used in rating OYAK was the Global Investment Holding Companies Industry Methodology published in October 2007. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Ordu Yardimlasma Kurumu ("OYAK"), based in Ankara, Turkey, is the private top-up pension fund of the Turkish Military personnel, governed by its own law and run by professionals. As a mutual assistance organisation, its purpose is to provide permanent members with retirement, death, disability and pension benefits, and to make personal loans; and to provide temporary members with death and disability benefits. OYAK functions as an additional pillar to the pension provided by the state and its pension payments are not intended to substitute the basic state pension provision.

REGULATORY DISCLOSURES

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Martin Kohlhase Vice President - Senior Analyst Corporate Finance Group Moody'sInvestors Services Limited, Dubai Branch Gate Precinct 3, Level 3 P.O. Box 506845 DIFC - DubaiUAE Telephone: 00971 4237 9536 David G. Staples MD - Corporate Finance Corporate Finance Group Telephone: 00971 4237 9536 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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