15 Mar 2005

CITIC Prudential awarded life insurance licence for Wuhan in Central China

Prudential plc ('Prudential') today announces its intention to exchange all of its £300,000,000 6.875% Bonds 2023 ('2023 Bonds') for new Sterling denominated fixed/floating subordinated capital securities with first call date in 2023 ('2023 Capital Securities') and its £250,000,000 5.875% Bonds due 2029 ('2029 Bonds') for Sterling denominated fixed/floating subordinated capital securities with first call date in 2029 ('2029 Capital Securities') (each a 'Proposal' and together the 'Exchange Proposals'). The transaction is designed to deliver a more efficient capital structure following recent regulatory changes, which render senior debt no longer as capital efficient for Prudential as in the past.

Prudential has consulted a Special Committee of the Association of British Insurers, representing approximately 27.6% of the outstanding 2023 Bonds and 29.6% of the outstanding 2029 Bonds, who consider the terms of the Exchange Proposals to be acceptable and intend to accept them in respect of their holdings.

The Exchange Proposals are being made separately upon the terms and subject to the conditions set out in the Information Memorandum dated 12 May 2005. The Exchange Proposals will expire on 1 June 2005, unless amended or terminated as provided in the Information Memorandum. The Early Response Date to be eligible for an Early Response Payment is 25 May 2005.

The exchange for each Series of Bonds is to be effected by way of an Extraordinary Resolution ('Resolution') to approve the exchange of all of the outstanding nominal amount of Bonds for the respective Capital Securities. Bondholder meetings are convened for 3 June 2005.

Capitalised terms used in this announcement and not otherwise defined have the meanings given to them in the Information Memorandum.

ENDS

Enquiries:

Media Investors/Analysts
Clare Staley 020 7548 3719 Marina Lee-Steere 020 7548 3511
Joanne Davidson 020 7548 3708

About Prudential

*Prudential plc is a leading international financial services group, providing retail financial services and fund management in its chosen markets: the United Kingdom, the United States, Asia and continental Europe.

Prudential has been writing life insurance in the United Kingdom for over 150 years. Today, Prudential has over 16 million customers worldwide and over £187 billion of funds under management (as at 31 December 2004).

In the United Kingdom Prudential is a leading life and pensions provider offering a range of retail financial products. M&G is Prudential's UK & European Fund Manager, with around £126 billion of funds under management. Jackson National Life, acquired by Prudential in 1986, is a leading provider of long-term savings and retirement products to retail and institutional customers throughout the United States. Egg plc, in which Prudential has a 78 per cent shareholding, provides banking, insurance and investment products through its internet site www.egg.com.

Prudential is the leading European-based life insurer in Asia with operations in 12 countries.

*Prudential plc, a company incorporated and with its principal place of business 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. It has been in existence for over 150 years and has over £187 billion in assets under management, as at 31 December 2004. 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.

About CITIC Group (China International Trust and Investment Corporation)

CITIC was established on October 4 1979 by Rong Yiren. The creation of CITIC was initiated and approved by Deng Xiaoping, chief architect of China's reform.

CITIC is a window on the way China has opened to the outside world. Since its inception, CITIC has always adhered to the principle of innovation. In line with government laws, regulations and policies, CITIC has attracted and utilised foreign capital, introduced advanced technologies, and adopted advanced and scientific international practices in operations and management. CITIC has established successful, strong performing businesses in many fields. As a result, CITIC has made significant contributions to the country's reform and opening up drive and has improved China's reputation both domestically and abroad.

CITIC has grown into a large multinational conglomerate. It now owns 44 subsidiaries in countries including Hong Kong, the United States, Canada, Australia and New Zealand. The company has also set up representative offices in Tokyo, New York and Frankfurt. CITIC's core business ranges from financial services to service industries. By the end of 2003, CITIC had total assets of over RMB 596 billion (£39.3 billion).

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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).