[2] S&P Affirms AAA/A-1+ Rtgs on Allianz; Outlook Stable.

LONDON--(BUSINESS WIRE)--Nov. 8, 1999--

Standard & Poor's today affirmed its triple-'A' long-term counterparty credit and insurer financial strength ratings, and its 'A-1'-plus short-term counterparty credit and commercial paper ratings on Allianz AG, and its ratings on Allianz's related entities, following the announcement that the Munich-based insurance group is to acquire a 70% controlling stake in U.S. fund manager Pimco Advisors, for a consideration of US$3.3 billion. The outlook on Allianz is stable.

This transaction realizes Allianz's ambitions to make asset management an additional core activity of the group, and enhances its international business position. The addition of Pimco will place Allianz in the top six asset managers globally, with combined funds under management of US$647 billion, an increase of 60.5% over the existing Allianz Asset Management (AAM) operation. (Moreover, only 11% of AAM's existing funds are managed on behalf of third parties).

As the largest bond manager in the U.S., Pimco is complementary to AAM, whose expertise is more in the equities sector, and which operates mainly in Europe. Pimco enjoys an excellent reputation in the U.S. market, and Allianz has taken steps to secure the retention of Pimco's highly regarded investment professionals.

Although the amount being paid for Pimco is significant, and is a full price relative to annual net earnings of US$150 million to US$200 million, Allianz's existing risk-adjusted capitalization, on a consolidated group basis, will continue to be comfortably within the triple-'A' range according to Standard & Poor's model.

Standard & Poor's expects the transaction to be financed partly by debt issuance, but does not expect fixed-charge coverage to fall below 10 times based on pro forma 1998 GAAP earnings. Group financial leverage (debt to total adjusted capital) is also expected to remain consistent with the rating, at less than 15%, Standard & Poor's said. -- CreditWire