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Swiss Life Holding: Solid foundation for new strategy - CHF 1.1 billion in additional funds

18.11.2002

Swiss Life Holding plans to create an additional CHF 1.1 billion in equity capital through the issuance of 10 839 704 new shares and a new form of convertible. The rights offering is expected to raise gross proceeds of CHF 856 million. It is fully underwritten by a syndicate of banks led by Credit Suisse First Boston. The convertible offering is expected to raise gross proceeds of approximately CHF 200 million, subject to increase up a maximum of CHF 250 million. The new equity will be used to strengthen Swiss Life’s capital base and regulatory solvency and to support the implementation of the new strategy. This lays the groundwork for successfully focusing the company on its core business in the marketplace and restoring Swiss Life to a position among the leading life insurers with a European reputation.

Swiss Life Holding today announced the terms of its rights offering and the size of a planned concurrent offering of Mandatory Convertible Securities.

- The subscription period for the new shares, for which advance subscription rights have been granted to existing shareholders, starts on 25 November. The rights offering comprises a one-for-one rights offering to existing shareholders at a subscription price of CHF 79 per share. Based on the total number of shares offered (10 839 704) the offering will raise new funds amounting to CHF 856 million for the Swiss Life Group. The rights will be traded on the stock exchange between 25 November 2002 and 2 December 2002 and shall be exercisable from 25 November 2002 until noon CET on 3 December 2002. Shares for which rights have not been exercised may be sold on the market by Credit Suisse First Boston in the name of the underwriting syndicate. The prospectus relating to the rights offering is being published today, 18 November 2002.


- The Mandatory Convertible Securities will initially be offered to existing shareholders through the granting of advance subscription rights. The priority subscription period for the securities will take place during the same subscription period as the rights offering. The Mandatory Convertible Securities will be converted mandatorily into Swiss Life Holding shares in December 2005, at the latest, if not previously converted by the shareholder. The Mandatory Convertible Securities are thus effectively a forward sale of Swiss Life Holding shares. The conversion ratio adjusts to a degree, which will enable Swiss Life Holding to participate in any future share price appreciation up to a certain amount. The detailed terms are to be set on 4 December 2002. The securities qualify for equity credit in accordance with Standard & Poor's.


The net proceeds of the rights offering and the Mandatory Convertible Securities will be used for implementation of corporate strategy. The capital increase also supports an orderly divestiture programme in connection with the new strategy. Commenting on the announcement, Group CEO Rolf Dörig said: "This capital increase is an integral part of the new strategic orientation we have already introduced. I have spoken to many of our principle shareholders recently and am gratified that they have confirmed their intention to participate in the rights offering to an amount representing more than 35% of the rights issue. This a good start for the road show over the next 10 days, during which I am looking forward to meeting other shareholders and investors."


Details of the transaction

Rights offering:
The rights offering comprises a one-for-one rights offering to existing shareholders at a subscription price of CHF 79 per share. Swiss Life Holding shareholders of record prior to commencement of trading on 25 November 2002 will be offered 10 839 704 new registered shares with a nominal value of CHF 50 each out of the ordinary capital created at the Swiss Life Holding extraordinary general meeting to be held on 18 November 2002. The rights will be traded between 25 November 2002 and 2 December 2002 and shall be exercisable from 25 November 2002 until noon CET on 3 December 2002. Offered shares for which rights have not been exercised will be sold by the underwriting syndicate on the market. Delivery of shares against payment of the Offer Price takes place on 6 December 2002. The prospectus relating to the rights offering is being published today, 18 November 2002.

The rights offering has been fully underwritten, subject to customary terms and conditions, by a syndicate of banks lead-managed by Credit Suisse First Boston. Deutsche Bank, Fox-Pitt, Kelton, HSBC and JPMorgan are acting as co-lead managers and Bank Sarasin & Co. Ltd., Rüd Blass & Cie AG Bankgeschäft, swissfirst Bank AG and Zürcher Kantonalbank are acting as co-managers.

Mandatory Convertible Securities:
Concurrent with the rights offering, Swiss Life Cayman Finance Ltd. will issue approximately CHF 200 million of the Mandatory Convertible Securities irrevocably and unconditionally guaranteed by Swiss Life Holding. The issue size is subject to increase to a maximum of CHF 250 million. The Mandatory Convertible Securities will be offered from 25 November 2002 until 3 December 2002 to existing shareholders of Swiss Life Holding in the form of non-tradable advance subscription rights (Vorwegzeichnungsrechte). Shareholders of record of Swiss Life Holding prior to commencement of trading on 25 November 2002 will be entitled to subscribe for the Mandatory Convertible Securities in the ratio of 44 Swiss Life Holding shares per CHF 1 000 nominal value of the Mandatory Convertible Securities. The conversion price and fixed coupon of the Mandatory Convertible Securities will be set on 4 December 2002 based on a bookbuilding with a fixed subscription price of 100%. From 27 December 2002 until the twentieth trading day prior to the maturity date (19 December 2005), each Mandatory Convertible Security with CHF 1 000 nominal value will be, in accordance with its terms, convertible free of charge into Swiss Life Holding registered shares at the Minimum Conversion Ratio.

The Minimum Conversion Ratio will be determined by dividing the nominal value of one Mandatory Convertible Security of CHF 1 000 by the Maximum Conversion Price, which will be no higher than 120% of the reference share price at the time of pricing; the Maximum Conversion Ratio will be determined by dividing the nominal value of one Mandatory Convertible Security of CHF 1 000 by the Minimum Conversion Price, which will be equal to 90% of the reference share price at the time of pricing, on 4 December 2002. Unless previously called and converted by the issuer, the Mandatory Convertible Securities will be mandatorily redeemed in registered shares of Swiss Life Holding after 3 years. The number of registered shares delivered per Mandatory Convertible Security at maturity (“Conversion Ratio”) depends on the share price of Swiss Life Holding and will be calculated based on the average of the closing prices of the registered shares on virt-x on the fifteen (15) consecutive trading days ending on the third trading day immediately prior to the maturity date. The Conversion Ratio will in any case be no lower than the Minimum Conversion Ratio and no higher than the Maximum Conversion Ratio.

The issuer will pay a fixed coupon of a minimum of 5.25% p.a. per Mandatory Convertible Security, plus an amount equal to the dividend paid by Swiss Life Holding, calculated on such number of registered shares that corresponds to the fraction of CHF 1 000 (i.e. equal to the nominal amount) divided by the Share price at pricing. The fixed coupon payments may in certain cases at the option of the Issuer be payable in registered shares.

The final terms and conditions (including the total issue amount, the fixed coupon, the Minimum Conversion Price, and the Maximum Conversion Price) will be fixed no later than 4 December 2002. The payment for the allocated Mandatory Convertible Securities will take place on 19 December 2002. Admission for the listing of the Mandatory Convertible Securities on the main segment of the SWX Swiss Exchange will be sought.

Credit Suisse First Boston is the sole lead manager and bookrunner of the Mandatory Convertible Securities offering.

The prospectus relating to the rights issue will be published on the Swiss Life website at www.swisslife.com.

The Swiss Life Group is one of the leading European life insurance companies for both corporate and individual customers. The largest life insurer in its home market of Switzerland, it also serves other core markets in France, Germany, the Netherlands and Belgium/Luxembourg. Multinational clients enjoy comprehensive service delivered through an international network of nearly 50 partners.
Legal Disclaimer:
The purpose of this publication is to inform shareholders of Swiss Life Holding and the public. This press release does not consti-tute an offer to buy or to subscribe to securities of Swiss Life Holding or any of its affiliates and it does not constitute an offering circular within the meaning of Art. 652a of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of SWX Swiss Exchange. Investors should make their decision to buy or to subscribe to new shares solely based on the corresponding prospectus containing also the recent developments of the Swiss Life group. This prospectus is expected to be
published on 18 November 2002 and available on the website of Swiss Life at www.swisslife.com. Investors are furthermore ad-vised to consult their bank or financial adviser.

This publication contains specific forward-looking statements, e.g. statements including terms like “believe”, “assume”, “expect” or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of the company and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties readers should not place undue reliance on forward-looking statements. The company assumes no responsibility to update forward-looking statements or to adapt them to future events or developments.

Under US, Australian, Hong Kong or Japanese securities laws, US, Australian, Hong Kong and Japanese shareholders of Swiss Life Holding are prohibited from participating in any of the securities offerings mentioned in this press release.

THIS PUBLICATION IS NOT BEING ISSUED IN THE UNITED STATES OF AMERICA AND SHOULD NOT BE DISTRIBUTED IN THE UNITED STATES, TO UNITED STATES PERSONS OR TO PUBLICATIONS WITH A GENERAL CIRCULATION IN THE UNITED STATES. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES. IN ADDITION, THE RIGHTS, SHARES AND MANDATORY CONVERTIBLE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND ACCORDINGLY MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE UNITED STATES OR TO U.S. PERSONS EXCEPT IN CERTAIN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE RIGHTS, SHARES AND MANDATORY CONVERTIBLE SECURITIES ARE BEING OFFERED OUTSIDE THE UNITED STATES TO NON-U.S. PERSONS IN RELIANCE ON REGULATION S UNDER THE SECURITIES ACT.

This press release is directed only at persons who: (i) are outside the United Kingdom; or (ii) have professional experience in mat-ters relating to investments; or (iii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (all such persons together being referred to as “relevant persons”) and this must not be acted on or relied upon by a person who is not a relevant person.

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