COMMERCIAL UNION GETS MEDIUM-TERM NOTE PROGRAM
Commercial Union Assurance <CUAC.L>, a
composite insurance company in the U.K., Said it is arranging a
financing facility totalling 750 mln European Currency Units
(ECUs) which will now include a medium term note program.
    Barry Cameron-Smail, Commercial Union's treasurer, said the
new financing will not increase its debt outstanding but rather
act as an umbrella for all its financing needs.
     Commercial Union has had a Euro-commercial paper program
since the autumn of 1985 and a guilder commercial paper program
since January 1986.
    Cameron-Smail said Commercial Union decided on having the
financing denominated in ECUs because it is more stable than
most major currencies, and because it would give greater
flexibility in its financings as it expands operations abroad.
    Although banks are anxious to develop a market for medium
term notes, only a few companies such as Electrolux AB and
Pepsico Inc have gone so far as to arrange one. Commercial
Union is the first U.K. Company to set up such a program.
    Cameron-Smail said the company seeks to help the
development of such a market as it would provide a new funding
base for its medium term assets.
     Cameron-Smail said that aside from traditional lines of
business, Commercial Union would like to move into other areas
where it may not be able to fund the assets itself. "This (the
medium term note program) will be the platform for developing
those assets," he said.
    He said Commercial Union will work closely with dealers for
the note program to find the right pricing level to satisfy
investor demands. The program will be investor driven, he
noted, adding that the company wants the notes placed with end
investors and not traded in the secondary market.
    Commercial Union will be able to issue medium term notes in
U.S. Dollars or sterling, with the dollar notes listed in
Luxembourg, while the sterling notes will be listed in London.
    Bankers expect that the maturities will be concentrated in
the one to five year area.
    The dealers for the program are Barclays de Zoete Wedd,
Credit Suisse First Boston Ltd, Goldman Sachs International,
Swiss Bank Corporation International Ltd and S.G. Warburg and
Co Ltd.
 REUTER
