Fortis Bank & ING Group Celebrate Bicentennial of Historic Louisiana Purchase Bond Transaction.

Business Editors

NEW YORK--(BUSINESS WIRE)--June 3, 2004

First US Sovereign Debt Issued to Foreign Markets

Financed Landmark Real Estate Transaction

Fortis Bank and ING Group celebrate the 200th anniversary of the historic bond transaction that financed the United States' purchase of the Territory of Louisiana from France, in honor of the firms' shared legacy as underwriters of one of the most famous transactions in United States history.

"With international finance in its infancy, this was the first US issuance targeted to the international markets and was the most complex and largest transaction the markets had yet absorbed," said Tim Schantz, ING, Head of Corporate Financial Services, Americas. "While virtually unknown compared to the historical Louisiana Purchase, the capital markets transaction that financed it served to consolidate US credit-worthiness in the international markets. The government's servicing of the Louisiana bonds was impeccable and the debt was repaid ahead of schedule. It presents a fascinating picture of international high finance in the early 1800s, and has equal historical importance in setting the stage for the global, liquid, regulated markets we enjoy today."

The Louisiana Territory was sold to the United States by France in April 1803 for US$15 million, a sum representing a 19% increase in the nation's public debt of about US$80 million. The Purchase was primarily financed by the issue of US$11.25 million US government six percent bonds in the Amsterdam and London markets in early 1804. (The additional US$3.75 million of the purchase price was financed through the US government's payment of French debts owed to US citizens.) The bond issue was underwritten by predecessor firms of Fortis and ING: Baring Brothers of London and Hope & Co. of Amsterdam, the most powerful financial institutions participating in the world's capital markets in the early 1800s. Barings was acquired by ING Group in 1995, and Hope & Co. merged in 1966 with Mees & Zoonen, which became part of Fortis Bank's private banking arm MeesPierson in 1997.

On the Bicentennial of this historic transaction, Fortis and ING published details on the financing in a brochure based on the archives of Barings and Hopes. The archives indicate that the success of the transaction resulted in large part from the bankers' ability to manage the considerable risks associated with the transaction and the large sum the banks were underwriting.

Not yet the economic powerhouse the nation is today, the United States was an "emerging market" investment in 1803. The United States' financial system had been recently established with the formation of the Treasury in 1789 and the New York Stock Exchange in 1792, making US sovereign debt a higher-risk investment for the more established European financial community. "The US government had limited debt servicing capacity, primarily relying on Federal customs tariffs for revenues," according to Thomas Fleming, historian and author of The Louisiana Purchase (2003, John Wiley & Sons). "In 1804, Federal customs revenues were US$10.48 million and total Federal revenue was US$11.83 million." The US$11.25 million Louisiana Purchase financing represented 95% of the country's annual revenue, much of which was already allocated to existing debt service.

By the agreement of April 1803, Barings and Hopes purchased the bonds from France at a 13.3% discount to the face value of the bonds and were able arrange underwriting before they received the bonds in early 1804. Despite the risk, Barings and Hopes profits from the transaction are estimated to be considerable. In addition to the initial 13.3% discount, the banks improved their profits when France's indebtedness led the nation to negotiate for an accelerated final payment, rather than having payments spread over a 23-month period. In return, the bankers received an additional discount of FF1.675 million, or US$309,000, on the total purchase price. Although it is difficult to determine the exact profits based on historical documents, Albert Gallatin, Secretary of Treasury at the time, estimated the banks' profit at US$3 million, although the banks' archives suggest the amount would have been lower.

Today, Fortis and ING are part of a broad community of internationally headquartered financial institutions from over 40 countries that engage in banking, securities and/or insurance activities in the United States. According to the Institute of International Bankers (IIB), the association that represents these institutions in the United States, the combined banking and non-banking assets of the U.S. operations of IIB member institutions currently total nearly $4 trillion. "Fortis, ING and our other member institutions enhance the depth and liquidity of our financial markets and contribute significantly to the U.S. economy," said Lawrence R. Uhlick, Executive Director and General Counsel of the Institute.

To celebrate their firms' 200 years of collaboration, the US capital markets divisions of ING and Fortis will host an exhibit of historic documents related to the Louisiana Purchase financing at Federal Hall, New York City, the US customs house that collected Federal revenues used to pay the Louisiana debt. ING and Fortis, in cooperation with IIB, will launch the exhibit with a reception on June 7th at Federal Hall. The exhibit, which is open to the public from June 8th to June 11th, will include the only surviving bond certificate, prospectus for the issue, and correspondence of the lead bankers Alexander Baring and Pierre Labouchere of Hopes.

About Fortis

Fortis (Euronext Brussells:FOR.BR; Euronext Amsterdam:FOR.AS) is an integrated financial services provider active in the fields of banking and insurance. With total assets of EUR 523 billion and shareholders' equity of EUR 11.9 billion, Fortis ranks among the twenty largest financial institutions in Europe. With its sound solvency position, broad risk spread and the extensive expertise of its 54,000 employees, Fortis combines global strength with local flexibility to provide optimum support to its customers.

About ING

ING Group (NYSE:ING) is a global financial institution of Dutch origin offering banking, insurance and asset management to over 60 million private, corporate and institutional clients in more than 50 countries. With a diverse workforce of about 112,000 people, ING comprises a broad spectrum of prominent companies that increasingly serve their clients under the ING brand.

About the IIB

The Institute of International Bankers (IIB), founded in 1966, represents internationally headquartered banking/financial institutions from over 40 countries that engage in banking, securities and/or insurance activities in the United States. The Institute's mission is to help resolve the many special U.S. legislative, regulatory and tax issues confronting it members. Collectively, the U.S. operations of IIB member institutions are an important source of credit for U.S. borrowers and have a substantial impact on the U.S. economy through job creation, operating and capital expenditures, taxes and other contributions.