The Versicherungsanstalt der österreichischen Bundesländer, Versicherungsaktiengesellschaft ("Bundesländer") makes the following announcement:

In the 66^th Annual General Meeting held on 22^nd June 1999 a conditional increase of the share capital from the current nominal figure of ATS 902,521,800 to a maximum of ATS 41,978,200 was made for the purpose of a swap of participation certificates for ordinary shares in accordance with §73d of the Insurance Supervision Act. At the same time the Management Board was empowered with the agreement of the Supervisory Board to make one or more public swap offers by 31^st December 2001 at the latest and to determine any possible additional payment to be made by participation certificate holders.

No additional payment by participation certificate holders
Following a decision by the Management Board taken on 15th September 1999 and its acceptance by the Supervisory Board of the Company on 17th November 1999, a swap may be made between 4th and 22nd October 1999 such that each participation certificate with a nominal value of ATS 100 may be swapped for an ordinary share of the same nominal value. No additional payment arises in connection with the swap,. In addition, all expenses and commission payable in relation to the swap will be paid by the Company. In the next few days the Company will publish more detailed conditions relating to the swap.