S&P Rating Upgrade

Paragon Group Of Companies PLC
27 July 2007



                               S&P RATING UPGRADE
                               ------------------
               REFLECTS QUALITY OF PARAGON'S BUY-TO-LET MORTGAGES
               --------------------------------------------------

Standard & Poor's, the international credit rating agency, has affirmed its
rating of AAA and upgraded its rating for the class B mortgage-backed
floating-rate notes issued by Paragon Mortgages (No.7) PLC securitisation from
single A to AA, an increase of three credit notches.

The excellent asset performance of PM7 reflects tight underwriting standards and
the credit strength of Paragon's buy-to-let products. The credit quality of
Paragon's buy-to-let portfolio remains exemplary and the arrears performance of
the portfolio continues to be better than that of mainstream residential
mortgages.

Paragon continues to experience strong investor appetite for bonds backed by its
prime buy-to-let mortgages and improving credit agency recognition. Paragon's
53rd securitisation completed last week with a £1 billion buy-to-let transaction
supported by its investor base in the UK and overseas, demonstrating the credit
market's continued appreciation of the superior quality of Paragon's buy-to-let
assets.

Nigel Terrington, chief executive of Paragon, said:

'Paragon remains focused on the quality of its buy-to-let mortgage business and
it is pleasing to see leading rating agencies recognising the quality of
Paragon's loan book and distinguishing Paragon from the factors impacting other
parts of the specialist lending sector.'

                                    - ENDS -

For further information, please contact:

John G Gemmell
Company Secretary
The Paragon Group of Companies PLC
Tel: [phone]




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