Centre Supports ResidenSea Financing of World's; First Ocean-going Luxury Condominium.

LONDON--(BUSINESS WIRE)--Oct. 13, 1999--

The Centre group of companies, a member of the Zurich Financial Services Group, announced today that it has provided an innovative insurance guarantee to Residensea Ltd., enabling ResidenSea to secure financing for the construction of the world's first residence/cruise vessel.

The vessel, to be completed in the year 2001, will contain 110 luxury residences that will be sold to individuals at prices ranging from $2 million to $6.8 million (43 have been sold to date).

The Centre insurance guarantee, which took the form of a surety bond, enabled ResidenSea to transfer the risk of a sales shortfall of the units during the construction phase, as well as to secure a portion of contingent financing. The contingent financing becomes effective only if the sale of all 110 residential units is not achieved during the construction period. If the contingent financing is called, reduced cash flows will restrict ResidenSea's ability to pay off the loan obligations, at which point Centre takes on that obligation. The contingent financing represents $260 million out of the total project cost of $355 million.

In the transaction, Centre maintains the credit risk support of the contingent equity and junior loan until the delivery of the ship in 27 months. Centre also provides the shipyard, Norway's Fosen Mek Verksteder A/S, with assurance that the vessel will be paid for.

Since the ResidenSea luxury ship is such a pioneering project, the capital markets were concerned about the risks its financing entailed. Centre's unique ability to transform these risks through a variety of innovative structures allowed the capital markets to supply the contingent financing ResidenSea required, evidenced by the lead participation of Germany's Westdeutsche Landesbank Girozentale, which is issuing and syndicating the senior loans.

According to Albert Peter of Centre's London office, "The ResidenSea transaction exemplifies Centre's ability to support complex and unique financial transactions and bring them to closure, demonstrating our expertise in combining banking and insurance services." ResidenSea is the latest of a group of Centre alternative financing transactions concluded in Europe, North America and Asia in recent months.

ResidenSea Ltd., incorporated in the Bahamas, was founded in 1997 to develop, build and operate exclusive residence/cruise vessels as an attractive alternative to traditional resort destinations, holiday homes and luxury condominiums. The company's major shareholders include prominent Norwegian individuals and institutional investors, the C.N.A. Insurance Group, Silversea Cruises and Vosen Mek. Versteder.

Centre, a member of Zurich Financial Services, is a full-service provider of customized insurance, reinsurance, structured finance and risk management programs. Centre has offices in Bermuda, Dublin, Hong Kong, London, New Jersey, New York, San Francisco, Sydney and Zurich. Centre reported $1.2 billion of capital and surplus, and $3.9 billion of total assets as of year-end 1998, with total revenues of $600 million in the year ended December 31, 1998. The Centre group of companies is rated "A" or "Excellent" by A.M. Best Company and "AA" or "Excellent" by Standard & Poor's Corporation for its claims-paying ability.

The Zurich Financial Services Group is a global leader in the financial services industry, providing its customers with solutions in the area of financial protection and asset accumulation. The Group concentrates its activities in four core businesses: non-life and life insurance, reinsurance and asset management. Headquartered in Zurich, Switzerland, the Group's worldwide presence builds on strong positions in its three home markets -- the United States, the United Kingdom and Switzerland. It has offices in more than 60 countries reaching over 33 million customers and employing 68,000 people.