Allianz announces subordinated bond

This transaction marks another step in a series of successful capital markets transactions by Allianz, who announced its intention to issue more hybrid capital when implementing the capital increase in spring 2003.

The joint bookrunners on the issue will be DrKW and Merrill Lynch. The bond will be perpetual, with a first par call at the option of the issuer after ten years. In the event of a non-call the fixed rate of interest payable during the initial ten years will convert to a variable rate and will step up by 100 basis points over the initial credit spread.

Bookbuilding, launch and pricing will happen next week following a European roadshow, subject to market conditions.

"The historically low interest environment combined with the high market liquidity provide an excellent opportunity for us to refinance short-term by long-term debt at attractive conditions. In addition, this step allows us to further enhance our capital base", says Stephan Theissing, Head of Corporate Finance of Allianz AG.

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