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February 9, 2010

Majority of Lenders Believe the Dow (DJIA) will Yield Gains in 2010

Lending Survey Results Also Predict Housing and Capital Markets Highest Impact to Economy

PHILADELPHIA (February 9, 2010) —- Over 80% of lenders believe the Dow Jones Industrial Average (DJIA) will yield gains in 2010. Lenders also predict that constrained liquidity in the capital markets and sluggish housing market are the factors that will have the strongest potential to affect the economy in the next six months, according to the results of last quarter’s Phoenix Management “Lending Climate in America” Survey.

When asked “What is your expectation for the performance of the DJIA in 2010 after hitting 2009 highs in December 2009 above the 10,500 level”, forty percent of respondents anticipate the DJIA to increase between 5-10%. Nearly 35% believe the DJIA will show modest signs of improvement and increase between 1-5% in 2010 versus the 2009 ending tally. Nine percent are bullish and suggest that the DJIA will yield gains greater than ten percent in 2010. Seven percent believe the DJIA still has room to retreat and will decrease between five and ten percent in 2010. Five percent of Lenders” anticipate the DJIA to fall over ten percent in 2010 and the remaining five percent believe the DJIA will realize a modest decrease between one and five percent in 2010.

“While it is not surprising that housing and constrained liquidity were seen as having the biggest impact on the economy,” said Phoenix Managing Director and Shareholder Michael Jacoby. “I was a bit surprised that the overwhelming majority thought that the Dow would continue its growth this year.”

Seventy-one percent of respondents, when asked to indicate the economic factor with the greatest potential, designated constrained liquidity in the capital markets, while forty-three percent chose the continued sluggish housing market. Thirty-three percent agreed to the U.S. budget deficit as the having the strongest potential to affect the economy in the first half of 2010. Thirty-one percent chose “Other” factors as having the strongest impact on the near term economy. Twelve percent of respondents believe unstable energy prices will have the greatest potential economic impact. Finally, two percent of lenders anticipate the wars in Iraq and Afghanistan will have the strongest potential impact.

Over half of respondents have mixed reactions towards President Obama’s economic policy during the President’s first year in action. Fifty-two percent of respondents believe the U.S. economy showed some signs of improvement during President Obama’s first year in office, however significant issues remain. Forty percent classified President Obama’s economic initiatives to be unsuccessful as the U.S. economy is no better with the fiscal deficit increasing. The remaining nine percent of respondents are optimistic relative to Obama’s first year in office as they believe the U.S. economy has shown improvement

About Phoenix

Phoenix Management Services is an operationally focused advisory firm, providing turnaround, crisis and interim management services to middle market companies in transition. Since 1985, Phoenix has aggressively advocated on behalf of its clients in over 950 assignments nationwide by providing tangible operating solutions, effecting real change and performance improvement.

Phoenix Capital Resources specializes in providing capital advisory services to middle market companies in transition. As an operationally focused firm, Phoenix Capital assists distressed and growth-oriented companies with complex transactions including re-financings, restructurings, capital raising, mergers and acquisitions, recapitalizations and auctions in the context of a bankruptcy. Phoenix Capital’s mission is to maximize transactional value and return on investment for its clients.

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