SOURCE: Euler Hermes ACI

May 31, 2005 14:20 ET

Euler Hermes' Rating Upgraded to "AA -" by Standard & Poor's

Standard & Poor's Raised the Rating of Euler Hermes -- The World's No. 1 Credit Insurer -- And Its Core Subsidiaries to "AA -" From "A +" Following Strong Profit Increases and Improved Operating Quality and Financial Earnings Over the Past Two Years

PARIS -- (MARKET WIRE) -- May 31, 2005 -- "This rating increase rewards the efforts we made in the last few years," said Euler Hermes CEO Clemens von Weichs. "For our clients, this evolution confirms Euler Hermes as a strong partner in the management and coverage of trade receivables."

Standard & Poor's indicates that the rating upgrade has been driven by continued earnings outperformance and improved capitalization. "Over the past two years, Euler Hermes has demonstrated that it can sustain its very strong operating performance despite the continued economic slowdown and a high level of insolvencies worldwide in 2003 and 2004, and has consistently exceeded Standard & Poor's expectations during this period," said S&P credit analyst Tatiana Grineva.

The rating upgrade by Standard & Poor's is based on:

--  A very strong operating performance and capitalization,
--  A solid competitive position,
--  Euler Hermes's strategic importance to the Allianz group.
    
Standard & Poor's has attached a negative outlook to this rating based upon the ratings outlook of Allianz, the ultimate parent company of Euler Hermes.

Euler Hermes CFO Nicolas Hein believes in the group's ability to deliver high quality results. "Euler Hermes' turnover for the first quarter 2005 is above our 5% growth target. The group is working to maintain its operating costs at a low level to achieve continuously higher operating earnings in line with its profitability targets," said Hein.

Clemens von Weichs concluded, "This rating upgrade was achieved thanks to every operating entity of our group and its teams which carried out the integration and the quick implementation of the business model."

Euler Hermes is the worldwide leader in credit insurance and one of the leaders in bonding and guarantees. With 5,400 employees in 40 countries, Euler Hermes offers a complete range of services for the management of customer receivables and posted a consolidated turnover of 1.9 billion euros in 2004. The North American headquarters (Euler Hermes ACI) is in Owings Mills, Md. For more information visit www.eulerhermes.com.

Euler Hermes, subsidiary of AGF and a member of Allianz, is listed on Euronext Paris. The group and its principal credit insurance subsidiaries are rated AA- by Standard & Poor's.

These assessments are, as always, subject to the disclaimer provided below.

Cautionary Note Regarding Forward-Looking Statements:

Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words 'may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue' and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group's core business and core markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) the extent of credit defaults (vii) interest rate levels, (viii) currency exchange rates including the Euro-U.S. Dollar exchange rate, (ix) changing levels of competition, (x) changes in laws and regulations, including monetary convergence and the European Monetary Union, (xi) changes in the policies of central banks and/or foreign governments, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures and (xiv) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.

The matters discussed herein may also involve risks and uncertainties described from time to time in Allianz AG's filings with the U.S. Securities and Exchange Commission. The Group assumes no obligation to update any forward-looking information contained herein.

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