BankBoston Development Company is launched.

BOSTON--(BUSINESS WIRE)--April 2, 1997--

New Subsidiary Characterized as an Investment Bank for Urban

Communities; BBDC Also Announces First Deal

Chad Gifford, CEO of BankBoston, today announced the launch of the BankBoston Development Company L.L.C. (BBDC). BankBoston is the first commercial bank in the nation to create a community development company that it characterizes as "an investment bank for urban communities." Functioning as a strong banking partner, BBDC will have a special focus on equity investment and provide sophisticated financial advice and solutions to small businesses to help stabilize local economies, create jobs and accelerate personal wealth creation. In addition to the affordable housing development that other bank-operated community development corporations across the country engage in, the for-profit BBDC will offer: small businesses equity investment that will make the bank a partial owner, credit (consisting of non-traditional loans with variable repayment terms), as well as financial advisory services.

Plans for a large community-based kick-off in the Dorchester neighborhood changed due to the region's heavy snowfall. Instead, the event was held today at BankBoston's headquarters downtown. On hand for the announcement was the U.S. Comptroller of the Currency, Eugene A. Ludwig, the senior bank regulator in the nation. "The new BankBoston Development Company," said Ludwig, "represents a truly extraordinary and creative commitment by BankBoston to inner-city markets."

BBDC estimates that over the next four years it will commit $100 million to target communities in Massachusetts, Connecticut, Rhode Island, New Hampshire, and parts of Florida. BBDC's $100 million should, in turn, stimulate an estimated half-billion total dollars of new financial resources in urban areas. Its role is to help transform and grow companies located in urban communities that are often operated by minorities or women. It will do this in three ways: First, BBDC will target companies with sales in excess of $500,000 for direct equity, provided they possess the potential for significant growth. Second, BBDC will work in conjunction with BankBoston line lenders to assist a broad spectrum of companies whose credit needs range from as little as $5,000 to as much as $5 million. Third, BBDC will help businesses overcome information and operational barriers that can hinder growth and development, just as inadequate capital does. Sophisticated technical assistance, business management training, networking opportunities and other consulting services also will be offered.

"This is a community development corporation with added value," said Gifford. "We're thinking of it as an investment bank for urban communities. This concept was developed through understanding the needs of our local communities and realizing that, for all of us to prosper, our urban neighborhoods need a level playing field. BBDC provides us with an enormous opportunity to not only exceed our Community Reinvestment Act regulatory requirements, but to do it profitably and realize value for our shareholders, while supporting urban revitalization."

"BankBoston is on the cutting edge of financial services with the establishment of the BankBoston Development Company," said U.S. Senator John Kerry, senior member of the Senate Banking Committee. "We cannot do enough, in both the private and public sectors, to encourage economic development and investment in our neediest neighborhoods. I salute BankBoston's commitment to job creation and capital formation in the inner city."

BBDC will broaden opportunities for business ownership, create jobs and promote economic stabilization in low-to-moderated income communities, while delivering a reasonable rate of return on the investment. Although not its primary mission, to benefit start-up business, BBDC will invest in a limited number of micro-lending and investment pools that target this market segment.

The introduction of BBDC is a natural extension of the groundbreaking work of First Community Bank (FCB), BankBoston's `bank-within-a bank,' a nationally renowned institution led by FCB President Gail Snowden. FCB delivers financial products and services via 50 branches throughout New England to meet the consumer and commercial needs of residents and small businesses in an expanding number of urban communities.

BBDC is chartered under regulations from the Office of the Comptroller of the Currency that permit the creation of bank-owned community development corporations serving a public purpose. It will draw on the expertise of other businesses at BankBoston -- BankBoston Ventures, Small Business Lending, and Developmental Real Estate -- to deliver BBDC products and services and to source and close deals.

Today, BBDC also announced its first deal. In cooperation with the Massachusetts Housing Financing Agency (MHFA) and the Massachusetts Housing Equity Fund (MHEF), BBDC is providing a total of $6.5 million to form an equity partnership to benefit Long Bay Management Company. Long Bay Management, one of Boston's largest minority-owned real estate developers and property managers, is rehabilitating 227 units of quality affordable housing geared to low-to-moderate income families in the neighborhood of Roxbury. The rehabilitation of this 17-building, multi-block property will employ 300 workers, of whom over 90 percent are minorities and/or they live in the community, and it will pay prevailing trade wages. In a addition, more than 20 minority-owned subcontractors will be engaged in the project.

"While we're extremely honored to be the financial catalyst to fulfill the economic dreams of developer Ken Guscott and his Long Bay Management Company, this deal is only suggestive of the full potential of BBDC," said BankBoston's Grady Hedgespeth, the new president of BBDC. "Over the next four years we expect to have nearly 100 deals that will be structured utilizing the unique equity component of BBDC that provides access to capital for small businesses and also establishes BBDC as a partner and stakeholder in these businesses.

"By making greater successes of these companies, and by reaching out to other capital sources in the public and private sectors, we will strengthen the economic infrastructure of our urban communities," added Hedgespeth.

"We are proud to call ourselves the first commercial bank to create an investment bank for urban America," said Ira Jackson, executive vice president of BankBoston, who will chair the BBDC Board. "No other bank in the nation is taking the kind of initiative we are to provide people who have long been left out of the economic mainstream with the means to be competitive."

BankBoston solicited and received extensive input from many civic, community, business and non-profit leaders throughout its service area regarding the formation of BBDC. Their feedback has proved invaluable and instrumental in defining the mission and goals of this new company. Moreover, Community Advisory Boards have been established in each state where BBDC will do business. These advisory boards will provide guidance and input as to the needs of individual urban communities and suggest where BBDC should focus its attention.

Business owners who want more information about BBDC can call: 1-888-BKB-FOCUS.

BankBoston (NYSE:BKB), with assets of $62.3 billion as of Dec. 31, 1996, was founded in 1784 and is the 15th-largest bank holding company in the U.S. BankBoston is engaged primarily in commercial and consumer banking in New England, providing financing to selected, corporations regionally, nationally and internationally, and full-service banking in key Latin America markets. The Corporation and its subsidiaries operate through a network of 650 offices in the U.S. and through more than 100 offices in 23 countries in Latin America, Europe and Asia, the third largest overseas network of any U.S. bank. The Corporation's common and preferred stocks are listed on the New York and Boston stock exchanges.

CONTACT: BankBoston

Bruce E. Spitzer, 617/788-7812