Swiss Re, Société Générale Conclude $1.075 Billion

October 27, 2000

Swiss Re and the French Bank Société Générale (SocGen) announced that they have jointly concluded the financing of a line of credit up to $1.075 billion for Compagnie Financière Michelin (CFM), the holding company for the Michelin tire group.

The novel package, put together by a team at Swiss Re New Markets and SocGen combines elements of both banking and insurance. During the next 5 years CFM can draw on the credit line in the normal manner, paying LIBOR plus 70 basis points for any portion taken down. These loans would be repaid by 2012, and credit auctions would be held in years six, eight and ten to adjust the rates, if necessary.

In addition CFM has a guarantee – the insurance part of the deal -that its normal growth and capital needs will be sustained, even in the face of adverse economic occurrences in its principle markets, the U.S. and the EU. Triggers, based on the GDP in those markets would operate to assure Michelin continued access to the funds it may require for growth, restructuring, or other needs.

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