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Aon Places Innovative Credit Enhancement Structure for AmBev.

Business Editors

CHICAGO--(BUSINESS WIRE)--March 5, 2002

Aon Corporation (NYSE:AOC), announced today the successful closing of Ambev's $500 million debt issue enhanced by commercial political risk insurance. UBS Warburg led this transaction, and Aon's Risk Capital Products Group worked with Signet Participations Ltd. to structure and place the political risk insurance for Ambev.

"This is yet another example of the innovative work Aon continues to do in the areas of credit enhancement and emerging markets," said Randy Crawford, director at Aon's Risk Capital Products Group. The AmBev bond was given an investment-grade rating by all three of the major ratings agencies, with a Standard & Poor's rating of BBB- (three notches above Standard & Poor's BB- foreign currency rating for Brazil), a Fitch rating of BBB- (three notches above Fitch's BB- foreign currency rating for Brazil), and a Moody's rating of Baa3 (four notches above Moody's B1 foreign currency rating for Brazil). The issue was the first political risk insured bond issue to be rated by all three agencies.

"Fitch is pleased to have rated the AmBev transaction," said Mia Koo, director of International Structured Finance at Fitch IBCA Duff & Phelps. "This is an example of a well-structured transaction that takes a strong corporate name and mitigates specific sovereign risks in order to achieve an investment grade rating."

"We are seeing political risk insurance being used more frequently these days because it allows transactions to pierce the respective country ceiling of the jurisdiction where the issuer is located," said Tiziana DiTullio, an analyst in Moody's Latin American Structured Finance group. "For a transaction to accomplish this, there must be some type of external support sized to cover debt service payments for 18 months; this can take the form of political risk insurance, among other types of coverage. For the AmBev transaction, this support was provided by a political risk insurance policy as well as an offshore reserve account."

"The importance of political risk insurance was undervalued until recently, when Argentina imposed restrictions on foreign currency transfers," said Diane Audino, director, Latin American Structured Finance Group at Standard & Poor's. "We used our proprietary computer based model to assess the exchange control risk, and believe that two years' protection provided by the insurance and a reserve account is sufficient for this transaction."

UBS Warburg was the lead arranger of the transaction and continues to be the leader in this sector by both number of transactions and aggregate dollar value. Aon, Signet and UBS Warburg personnel pioneered this innovative use of commercial political risk insurance in 1999 and have introduced several innovations since that time for the benefit of issuers. "AmBev is the world's fourth largest brewer and sixth largest beverage company, and the success of its bond issue is a further illustration of the significant economic and other benefits this product offers to high quality issues otherwise constrained by sovereign debt ceilings," said Peter Behr, principal at Signet.

Aon Corporation (www.aon.com) is a holding company that is comprised of a family of insurance brokerage, consulting and insurance underwriting subsidiaries.

This press release may contain certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated, depending on a variety of factors such as general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, changes in commercial property and casualty premium rates, the competitive environment, the actual cost of resolution of contingent liabilities, the final form of the business transformation plan, the ultimate cost and timing of the implementation thereof, the actual cost savings and other benefits resulting therefrom, whether the Company ultimately implements the proposed spin-off of its underwriting operations, and the timing and terms associated therewith, and events surrounding terrorists attacks of September 11, 2001, including the timing and resolution of related insurance and reinsurance issues. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, are contained in the Company's filings with the Securities and Exchange Commission.
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Date:Mar 5, 2002
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