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Allianz in wonderland

German insurer Allianz must be happy. It says it has created a new product, developed with UBS Warburg, that will bring joy to investors, to Allianz's portfolio companies and most of all to Allianz itself. It's only a few of UBS Warburg's rival banks that cannot quite share the joy.


Allianz's three-year deal, worth e2 billion, is called market index-linked equity security (miles) and is similar to a mandatory convertible bond in that it will be converted into shares at maturity in February 2004 - with the option of early conversion after March 1 2002.


But miles is unique: it will be exchanged into the shares not of one company - as is usual on equity-linked issues - but into shares of one of three German blue chips: BASF, E.ON or Munich Re. Moreover, holders of the miles will not receive a fixed coupon but rather a return of 1.25% over the DAX, as valued on February 20 in 2002, 2003 and 2004.


International equity-linked bookrunners Jan - 19 Dec 2000*
Pos. Manager or Group Amt US$ m Iss. %Share
1 Goldman Sachs & Co 6,381.73



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