- Capital Stream Inc., an e-commerce provider of services and applications for the business finance industry, announced today a strategic alliance with leading investment bank Babcock & Brown, its most important such alliance to date. The strategic alliance will bring CapitalStream's B2B e-commerce financing network and integrated applications to the global mid- to large-ticket transaction market. Under the terms of the agreement, the two companies will work together to develop advanced online applications to help customers manage the spectrum of equipment and asset-based financing in the mid- to large-ticket market, from computer to transportation equipment. CapitalStream is a leader in enabling businesses to implement online financing e-commerce strategies to drive sales, improve customer experiences and manage credit risk.

Said Stephen Campbell, President and CEO of CapitalStream, "This alliance brings together the number one investment bank specializing in structuring and managing large asset-based financings with the leading enabler of online commercial finance transactions. The agreement will allow CapitalStream to further extend its market reach by leveraging Babcock & Brown's extensive market presence in the global finance marketplace. Babcock & Brown is not entering into this alliance in its role as an investment banker, but rather, as a strategic partner that will help CapitalStream penetrate new market segments around the world."

Founded in 1977, Babcock & Brown is the leading international investment bank specializing in originating, structuring and managing large asset-based lease, debt and project financings. With over $22 billion in financial transactions in 1999, Babcock & Brown operates out of 17 offices in 11 countries around the world. Babcock & Brown will bring its expertise in mid- to large-ticket and global financing to the product design process, along with joint marketing and investment capital. This will enable CapitalStream to extend its product offering into transactions valued from $250 thousand to $25 million. CapitalStream will create a range of web-based services to help financial institutions, brokers, vendors and Global 1000 firms arrange online commercial loans, leases, and lines of credit faster and more effectively.

Jim Babcock, President and CEO of Babcock & Brown, said, "CapitalStream has created the premier online transaction network enabling integrated financing at the point of sale, automating credit risk management and internal workflow. The company has signed up more than 200 customers who use CapitalStream.com as their e-commerce processing platform. Together, we plan to extend this reach into the mid- to large-transaction segment of the market on a global basis, and enable demand for credit and sources of credit to come together via the CapitalStream network."

The chief goal of the alliance is to provide financial institutions, vendors, equipment users, brokers and B2B e-commerce firms with the ability to implement web-based e-commerce solutions. CapitalStream will enable this through CapitalStream.com, which offers an open transaction network, program management tools, risk management and workflow automation for the entire financial supply chain. Services that CapitalStream expects to add as a result of the alliance include RFP management, credit -management, transaction and investor matching, bid solicitation and response, documentation management and multi-currency support for international leasing, lending, and lines of credit origination.

Using the integrated suite of online transaction applications that CapitalStream will develop, businesses will be able to create tailored customer finance programs, find network financing partners, reach new market segments electronically, manage mid- to large-ticket transactions, obtain access to leading third party credit information and integrate with legacy systems.

"CapitalStream is significantly ahead of the competition. Its business model reflects an understanding that success requires solving the full range of customer service, transaction networking and credit automation requirements of the industry," said Babcock.

San Francisco-based Babcock & Brown (www.babcockbrown.com) specializes in originating, structuring, arranging and managing asset-based, tax-optimized and project-based financings and acquisitions worldwide. In general the firm acts as an advisor, asset manager, underwriter, originator or principal. The company was founded in 1977 and currently employs more than 300 people in 17 offices worldwide. Effective January 1, 2000, Bayerische Hypo-und Vereinsbank AG acquired 20% of the company, the remainder of which is held by the principal officers and directors of the company.

Seattle-based CapitalStream offers end-to-end e-commerce marketplace solutions—including customer management tools, workflow automation and an online transaction network—for the global business finance market. The company’s e-commerce network, CapitalStream.com, provides an infrastructure for financing companies, manufacturers and B2B e-commerce firms to capture, grow and service customers. CapitalStream has been an established industry leader for five years, and in 1999, its 600 customers used CapitalStream products to facilitate $8.5 billion in transaction volume.

Jennifer Fox
Capital Stream, Inc.
206-548-1651
jenniferf@capitalstream.com

Scott Battishill
DDB Seattle
206-464-0197
scott.battishill@sea.ddb.com