09 Aug 2004

Prudential plc - Issue of US$250m subordinated securities

On 6 August 2004, Prudential plc issued US$250 million perpetual subordinated securities exchangeable into preference shares. They bear interest at 6.75% p.a., payable quarterly in arrears, and rank equal to preference shares.

The securities can be redeemed at Prudential plc's option on any interest payment date from 23 September 2009. Payments under the securities would be mandatorily or optionally deferred if Prudential plc fails to meet certain conditions relating to solvency which are set out in the terms and conditions of the securities.

Interest may be paid through an alternative coupon settlement mechanism at any time. Deferred interest is only payable at redemption or exchange, through an alternative coupon settlement mechanism, or upon a winding-up. Prudential plc has the option to exchange the securities into fixed-rate 6.75% preference shares on any interest payment date from 23 March 2010. Dividend payments on the preference shares are fully discretionary.

The securities were sold in the US market and are listed on the New York Stock Exchange. They are rated A by Standard & Poor's and Baa1 by Moody's. The proceeds will be used to refinance existing debt and for general corporate purposes.

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Prudential plc is an international company incorporated in the United Kingdom, and its affiliated companies constitute one of the world’s leading financial services groups. It provides insurance and financial services directly and through its subsidiaries and affiliates throughout the world, and it has been in existence for over 170 years. Prudential plc is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America, or the Prudential Assurance Company, a subsidiary of M&G plc (a company incorporated in the United Kingdom).

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Prudential plc is an international company incorporated in the United Kingdom, and its affiliated companies constitute one of the world’s leading financial services groups. It provides insurance and financial services directly and through its subsidiaries and affiliates throughout the world, and it has been in existence for over 170 years. Prudential plc is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America, or the Prudential Assurance Company, a subsidiary of M&G plc (a company incorporated in the United Kingdom).