Bear Stearns and GIB Launch a European First: F.A.B. CBO 2002-1 EUR 294m European Asset Backed CBO.

Business Editors

LONDON--(BUSINESS WIRE)--March 18, 2001

Bear, Stearns International Limited today announced the launch of F.A.B. CBO 2002-1 on behalf of Gulf International Bank (UK). The deal is the first ever cashflow arbitrage CBO of European mezzanine and subordinated asset backed bonds, was rated by Standard & Poors and Moody's and was issued in 3 rated tranches and 1 unrated tranche of EUR 15.5m:

Tranche          Amount        Rating     Avg Life    Pricing
----------       --------      -------    --------    ----------------
Tranche A1       EUR 250m      AAA/Aaa      6.8       Euribor + 50bps
Tranche A2       EUR 28m       AA/Aa2       7.5       Euribor + 80bps
Tranche B        EUR 16m       BBB/Baa2     7.5       Euribor + 225bps

The transaction is a repackaging of investments in European mezzanine and subordinated ABS to be managed by the London-based Financial Markets Group of Gulf International Bank. The deal was sole lead managed by Bear Stearns.

This is the first time that solely-European asset backed collateral has been used in a structure such as this. The transaction was marketed and sold throughout Europe to a diverse and widespread investor base.

Mark Moffat, co-head of European CDOs at Bear Stearns, said, "This is an innovative transaction and is a wonderful chance for Bear Stearns to be associated with yet another `first' in Europe. The deal was well received by both debt and equity investors and we expect many issues to replicate this structure in Europe."

Alex Veroude, head of Structured Products at Gulf International Bank, said, "We are delighted to launch the first deal of this nature as it offers a natural development of our niche market products."

Bear, Stearns International Limited (BSIL) is a wholly owned subsidiary of The Bear Stearns Companies Inc. BSIL's capabilities include investment banking, institutional equities and fixed income sales, trading and research, derivatives, financial futures, foreign exchange and global clearing.

Gulf International Bank (UK) Limited (GIBUK) is a wholly owned subsidiary of Gulf International Bank BSC. GIBUK manages capital in the financial markets through its portfolio and fund management activities.

Bear, Stearns International Limited is regulated by the FSA Gulf International Bank (UK) Limited is regulated by the FSA.