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Centre Provides Essential Credit Enhancement in Significant Industrial Project in Estonia.

Business Editors

LONDON--(BUSINESS WIRE)--Dec. 18, 2000

Centre Insurance International Company, based in Dublin, announced today that it had provided, what is believed to be, the first credit enhancement in Eastern Europe. This was an essential ingredient in the US$205 million financing for a new hot dip galvanising line project in Estonia. The Centre companies are all members of the Zurich Financial Services Group.

The financing will enable the Galvex group, which includes RUMA-Estonia OU, to create a new hot-dip galvanizing plant at Tallinn, Estonia using state-of-the-art technology supplied by Italy's Danieli. The plant will have a nameplate capacity of 400,000 tonnes per annum and is aimed at supplying high quality, high added value galvanised steel on a cost-effective basis.

Philip Harkin, President of Centre Insurance International Company, said: "This was an excellent opportunity for Centre to provide its credit enhancement product to support a highly innovative and complex project finance transaction.

"It is also Centre's first transaction in Eastern Europe and we are confident that it will lead to further transactions of this type in the region," he said.

The programme is structured as a payment undertaking in support of a subordinated loan, which has the effect of enhancing the credit quality of the project to the subordinated lender and improving the financing costs of the project. Support to enhance the credit quality of complex projects or businesses is a Centre speciality.

Harkin added: "We worked closely together with HypoVereinsbank and the other project sponsors. The ability to execute quickly and efficiently to secure a successful financing package under a tight timeframe enabled this transaction to happen and highlights the benefits that Centre can bring. It is also another example of how insurance companies can provide additional forms of capital within business."

HypoVereinsbank, Germany's second largest bank, acted as financial advisor and Lead Arranger on the senior debt. The project sponsors are International Steel Industries, LP, together with Danflat SpA, an affiliate of the Danieli Group. The Danieli Group is one of the world's leading suppliers of galvanizing plants.

The Galvex plant will be at the Port of Muuga in Tallinn, Estonia. The choice of location enables the plant to source its input easily from Eastern Europe, Scandinavia, and other markets. This flexibility will make it a competitive supplier to customers both in European and global markets.

Note to editors:

The Centre companies form a group within the Zurich Financial Services Group and provide an extensive service of customised insurance, reinsurance, structured finance and risk management programmes. Centre has offices in Bermuda, Dublin, Hong Kong, London, New Jersey, New York, San Francisco, Sydney, and Zurich.

Centre reported US$1.1 billion of capital and surplus, and $4.6 billion of total assets as of year-end 1999, with total revenues of $623 million in the year ended December 31, 1999. 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 financial strength and "Aa3" by Moody's Investors Services.

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 five business segments: non-life and life insurance, reinsurance, Farmers Management Services, and asset management. Headquartered in Zurich, Switzerland, the Group's worldwide presence builds on strong positions in its three key markets - the United States, the United Kingdom and Switzerland. It has offices in more than 60 countries reaching over 35 million customers and employing 68,000 people. Based on consolidated figures for 1999, the Group achieved gross premiums of USD 48 billion. This amount includes insurance deposits as well as premiums from the Farmers Exchanges. The net income amounted to USD 3.26 billion. On June 30, 2000, the Group had USD 435 billion of assets under management of which USD 260 billion represent funds managed for third-party institutional and retail customers.
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Publication:Business Wire
Geographic Code:7QATA
Date:Dec 18, 2000
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