Launch of New Fund

Intermediate Capital Group PLC
8 September 2000


ICG launches EuroCredit CDO II,
its second European high yield Collateralized Debt Obligation placed by Morgan
Stanley Dean Witter

Intermediate Capital Group PLC (ICG) today announces the launch of a new
(Euro)350m fund, its third successful fund launch in little more than a year. 
The fund, the second Collateralized Debt Obligation (CDO) managed by ICG and
placed by Morgan Stanley, follows the success of EuroCredit CDO I, Europe's
first CDO launched in August 1999.  That (Euro)400m fund is now fully invested
in a mix of high yield bonds, senior debt and mezzanine loans, and earlier
this week ICG's Mezzanine 2000 fund closed at (Euro)465m having attracted
substantial interest from investors across Europe.

ICG, Europe's leading provider of mezzanine finance, will act as investment
adviser to the fund on the purchase and management of the CDO II portfolio.  A
Collateralized Debt Obligation provides leverage on the portfolio of high
yield assets through rated liabilities.  CDOs have been an important vehicle
for investing in US high yield and a significant factor on the growth of the
US market, which is now estimated to have a total value of $ 700 billion, with
more than $100 billion invested in CDO funds.  As with the first fund, the
liabilities of the CDO II will be rated by Moody's Investor Services.

Tom Attwood, a managing director of ICG, said,  'Our funds under management
have grown to more than (Euro)1.5bn in just four years, as professional
investors continue to seek new assets for their funds.  The beauty of a CDO
fund is that each tranche provides a different level of risk/reward, so that
it appeals to a range of investors even though they might have different
investment objectives.'

'We believe that the European buy-out and high yield bond markets will
continue to grow significantly over the next few years. High levels of M&A
activity, consolidation across Europe, access to increasing amounts of private
equity funding and the existence of specialist high yielding funds such as our
two CDO's and our mezzanine 2000 fund will all contribute to the continued
expansion of the market.'

ICG will be investing in 20% of the subordinated notes of the fund, an
investment of around (Euro)10m.  Other investors include insurance companies
and banks across Europe.

Enquiries:
Tom Attwood/Andrew Phillips, ICG                  020 7628 9898
Gill Ackers/Simon Sporborg, Brunswick             020 7404 5959


'This document has been approved by Intermediate Capital Group Plc ('ICG')
which is regulated by IMRO solely for the purposes of section 57 of the
Financial Services Act 1986.  This document does not constitute or form part
of an offer of securities or a solicitation of any such offer, the past
performance of investments made or managed by ICG or any of its subsidiaries
is not a reliable indication of future returns.'


'The information contained herein is not for publication or distribution to
persons in the United States.  The securities referred to herein have not been
and will not be registered under the US Securities Act of 1933, as amended,
and may not be offered or sold without registration thereunder or pursuant to
an available exemption therefrom.'


Notes to Editors:

1.EuroCredit CDO II, Limited
  
  EuroCredit CDO II will invest in a diversified portfolio of European sub-
  investment grade credits consisting of high yield bonds, senior secured
  loans and mezzanine loans ('the collateral').  Intermediate Capital
  Managers Ltd, a wholly-owned subsidiary of Intermediate Capital Group PLC
  (ICG), is the Investment Adviser for the CDO and is responsible for
  selecting the portfolio and advising on ongoing investment decisions.  The
  fund will be invested over the course of the next few months commencing
  with investments in existing issues.
  
  The portfolio of assets will be financed by the issuance of various classes
  of securities, all denominated in Euros, providing different risk return
  profiles to meet investors' differing investment objectives. These include
  Class I and Class II Senior Notes with high investment grade ratings of Aaa
  and Aa2, respectively, Second Priority Notes rated Baa2, Third Priority
  Notes rated Ba3 and unrated Subordinated Notes.
  
  The cashflows from the portfolio investments will be allocated to these
  securities on a priority basis, with the highest rated securities receiving
  the highest priority and so on down the scale. This cascade of risk and
  reward provides the leverage to enable the Subordinated Notes to offer
  investors the potential for higher returns than would be received by
  investing directly in the high yield assets.  These Subordinated Notes
  constitute (Euro)53 million of the total fund size of approximately   
  (Euro)350 million.  Investors in the fund could therefore expect annual 
  yields of between 42bp over Euribor and/or more than 15%, depending on their
  chosen risk profile.
  
2.EuroCredit CDO I: an update

  EuroCredit CDO I, Europe's first ever CDO, was launched on 12th August
  1999.  It quickly attracted investors from across Europe and Asia.  Within
  12 months it was fully invested in such assets as high yielding bonds in
  Colt Telecom of the UK and ESat (Ireland); a tranche of senior debt in
  Kappa Packaging (Holland) and Cantrell & Cochrane (Ireland); and a
  mezzanine bond for Elior (France).
  
3.Collateralised Debt Obligations explained
  
  Collateralised debt obligations (CDOs) are special purpose vehicles that
  invest in a diversified portfolio of assets. The investments in CDOs are
  funded through the issuance of several classes of securities, the repayment
  of which is linked to the performance of the underlying securities that
  serve as collateral for the CDO liabilities.  The technology is similar to
  that used by banks for securitizing their loan portfolios; however, with
  CDOs it is used as a leveraged investment vehicle rather than a capital
  management tool.
  
  The investments are managed by an experienced investment manager, and the
  securities issued by the CDO are tranched into rated and unrated classes,
  which vary according to the expected return and corresponding risk.  The
  underlying portfolios typically consist of non-investment grade debt
  instruments, which may include high yield bonds, leveraged loans and other
  similar instruments.

4.Overview of the markets for Collateralised Debt Obligations and High
  Yield Bonds
  
  The market for CDOs is a significant sector of the asset backed securities
  market.  The first CDO was created over ten years ago, and it is now an
  established instrument for investors and an attractive vehicle for asset
  managers.  Last year alone Moody's rated $91 billion of CDO issuance.
  
  The earliest CDOs were backed by portfolios of US high yield bonds.  Later
  transactions introduced additional asset classes, but the majority of CDOs
  continue to include a portion of high yield bonds.  The high yield bond
  market in the US is well-developed and has been a viable source of funding
  for non-investment grade US companies for over 20 years.
  
  The high yield bond market for European borrowers is a more recent
  development, commencing in the last several years, and has experienced
  rapid growth since then.  New issue volume in the global high yield market
  since 1997 totalled $330.9 billion, while new issue volume in the European
  high yield market over the same period totalled $35.4 billion.
  
5.Intermediate Capital Group
  
  ICG is the leading arranger and provider of mezzanine finance to non-
  investment grade companies in Europe.  It was founded in 1989 and
  subsequently listed on the London Stock Exchange in 1994.  The company has
  a market capitalization of £500 million and balance sheet resources of
  approximately £700 million.
  
  ICG has arranged or provided in excess of £1.5 billion of mezzanine finance
  in 150 transactions.  It retained for its own account circa £1 billion of
  this, with the remainder either invested on behalf of its fund management
  clients or syndicated to third parties.  As of January 2000, ICG's
  portfolio totaled £460 million of assets, which consisted of investments in
  64 different companies, and it managed an additional £235 million of
  mezzanine for clients.  In addition, it manages two funds, the EuroCredit
  CDO I ((Euro)400 million) and Mezzanine 2000 ((Euro)475 million).  Up to
  January 2000, ICG has realised 56 investments, resulting in an average
  annual rate of return of between 20% and 25%.
  
  ICG has offices in London and Paris and employs 25 professionals, who
  together have many years of investment experience and of analysing credit
  and providing mezzanine finance throughout Europe.  ICG is regulated by the
  Investment Management Regulatory Organisation Limited (IMRO).