Issue of Debt

Legal & General Group PLC
20 November 2001

20 November 2001


 Legal & General issues a convertible bond for approximately £500 million and
  transfers ownership of the fund management subsidiaries within the Group.

Legal & General Group Plc announced today the launch of a convertible bond to
raise approximately £500m and, subject to FSA approval, the transfer of
ownership of fund management subsidiaries within the Group.

The transfer of the fund management subsidiaries will give rise to a gain in
the UK long term fund, which will boost the fund's regulatory capital by
around £400m. This additional capital will further strengthen the fund and
support its ability to continue to write rapidly growing volumes of new
business.

The transfer of ownership of the fund management subsidiaries better reflects
the growing external bias of the funds which they manage and also provides
these operations with increased flexibility in the development of their
businesses.

David Prosser, Group Chief Executive commented:

'This transaction is attractively financed for shareholders and enables us to
develop and build on the success which our investment business has achieved in
recent years.

The transaction will benefit both our policyholders and our shareholders. Our
UK life and pensions new business APE has grown by 24% per annum compound over
the last six years and in the fourth quarter is running substantially ahead of
last year. I am confident that we will achieve further growth in the years
ahead and this transaction provides us with greater capacity in the UK long
term fund to support that growth.'

Andrew Palmer, Group Director (Finance), said:

'In these market conditions, we believe that financing the transfer through a
convertible bond, on terms which reflect our strong credit rating, is both an
effective and an attractive form of funding for Legal & General.'

The details of the transaction are as follows:-

The convertible bond, which will mature in 2006, is expected to carry a coupon
of between 2.75% per annum and 3.25% per annum and a conversion premium of
between 25% and 30%. On conversion, the bond would result in the issue of
ordinary shares equivalent to just under 5% of the Group's current outstanding
share capital. The final terms of the convertible bond will be announced
following completion of a book-building exercise. Settlement of the
convertible bond issue is expected to take place in the third week of
December. UBS Warburg and Goldman Sachs International are acting as joint
book-runners to the bond.

It is expected that the bond will be rated AA by Standard & Poor's and Aa3 by
Moody's.

Legal & General's UK long term fund is rated AAA for claims paying ability by
Standard & Poor's and Aa1 by Moody's.

Subject to FSA approval, the fund management subsidiaries held within the
Shareholder Retained Capital of the UK long term fund of Legal & General
Assurance Society Limited (LGAS) will be transferred to new wholly owned
subsidiaries of Legal & General Group Plc. The ultimate ownership of the
subsidiaries is unchanged by the transfer, since both before and after the
transfer, ownership rests with Legal & General Group shareholders. The
consideration for the transfer will be between £550m and £600m, and is subject
to adjustments for net assets on completion. The proceeds of the convertible
bond issue will be used to fund part of the cost of the proposed transfer. The
balance of the payment required is being met by available internal resources.

The principal subsidiaries to be transferred (Subsidiaries), subject to FSA
approval, include:

 1. Legal & General Investment Management Limited and Legal & General Portfolio
    Managers Limited, which together form one of the UK's largest investment
    managers and had over £100bn under management as at 30 September 2001.
 2. Legal & General Assurance (Pensions Management) Limited, which provides
    pooled funds for corporate pension scheme clients.
 3. Legal & General (Unit Trust Managers) Limited, which is one of the UK's
    largest unit trust companies with £4.4bn of funds under management as at
    30 September 2001. In addition, it administers over £2bn of funds for
    external parties including Barclays and Alliance & Leicester.

In the six months to 30 June 2001, the Subsidiaries made an operating profit
before tax of £19m (full year to 31 December 2000: £62m). The fall in
operating profit in 2001 reflects changes in double taxation relief
legislation. The Subsidiaries had net assets of £156m as at 30 September 2001.
They were carried in the statutory accounts of the UK long term fund at £134m
on 30 June 2001.

Taking into account market levels at the end of the third quarter, 30
September 2001, when the FTSE 100 Index closed at 4903 and the yield on the 30
year gilt closed at 4.74%; the approximate value of shareholders' funds on an
MSS basis was £2.9bn compared with £3.1bn as at 30 June 2001.

Notwithstanding current equity market volatility, which impacts the level of
the Group's shareholders' funds, we believe our financial, brand, products and
distribution strengths will enable us to achieve further profitable new
business growth for the rest of this year and into 2002. Our UK new business
APE in the fourth quarter to date is showing over 50% growth compared with the
equivalent period last year.

Had this transfer taken place on 30 September 2001, LGAS's free asset ratio
would have stood at 11% on that date.

Dresdner Kleinwort Wasserstein has acted as financial adviser to the Board of
LGAS on the transaction. Goldman Sachs International has acted as financial
adviser to the Board of Legal & General Group Plc.

Contacts
Investors:
Peter Horsman                             020 7528 6362
Head of Investor Relations                [e-mail]
Neville Walton                            020 7528 6250
Director of Corporate Communications      [e-mail]

Media:
John Morgan                               020 7528 6213
Head of PR                                [e-mail]
Tony Carlisle                             07973 611888
Citigate Dewe Rogerson                    020 7638 9571
                                          [e-mail]



Notes:

 1. A conference call for the news services will take place at 8.00am.
    The number is [phone]. No pin is required - please quote Legal
    & General and David Prosser as the Chairperson.
 2. A conference call for analysts and investors will take place at 9.00am.
    The number is [phone]. No pin is required - please quote Legal
    & General and Andrew Palmer as the Chairperson. This call can be replayed
    until 9am on Thursday 22 November by calling [phone]. The pin
    is 118228.

 3. Legal & General Group Plc had 5,155,684,307 ordinary shares of 2.5p
    outstanding as at the close of business on 16 November 2001. If holders of
    the new convertible bond issue were to exercise their conversion rights in
    full, then it would represent just under 5% of the outstanding share
    capital.
 4. During 2000, £147m of senior debt was raised under Legal & General Group's
    Medium Term Note programme and passed down to the UK long term fund in the
    form of subordinated debt. A further £256m has been raised and similarly
    passed down during 2001.
 5. The free asset ratio is calculated on the basis of Form 9 of the FSA
    Returns and represents the excess of available assets over long term
    business liabilities (both assets and liabilities being determined on a
    statutory basis) expressed as a percentage of liabilities. This excess is
    calculated using resilience test 2, contains no implicit items and is
    equal to around 2.5 times the long term business required minimum margin.
 6. Financial information relating to 31 December 2000 has been audited by the
    Group's auditors, PricewaterhouseCoopers. Financial information given in
    respect of other dates has not been audited.
 7. Details of companies to be transferred including principal activities. The
    asterix indicates that they are regulated by the FSA.

    Subsidiaries of Legal & General Investment Management (Holdings) Limited:

    *Legal & General Assurance (Pensions Management) Limited

    Insurance company writing long term insurance business (pooled and
    segregated funds) for pension fund clients

    *Legal & General Investment Management Limited

    Provision of investment management services covering invested securities
    to external clients.

    Legal & General Portfolio Managers Limited

    Provision of investment management services covering invested securities
    to in-house clients

    Legal & General Property Limited

    Legal & General Property Partners (Industrial Fund) Limited

    *Legal & General Property Fund Managers Limited

         Management of property unit trust

    *Legal & General Ventures Limited and its subsidiaries

    Subsidiaries of Legal & General (Retail Holdings) Limited:

    *Legal & General (Portfolio Management Services) Limited

              Management of ISA and PEP product



    *Legal & General (Unit Trust Managers) Limited

              Management of Unit Trusts
 8. Annual Premium Equivalent (APE) is total new annual premiums plus 10% of
    total new single premiums.
 9. In connection with the issue of the convertible bonds UBS AG acting through
    its business group UBS Warburg ('UBS Warburg'), may effect transactions
    which stabilise or maintain the market price of the convertible bonds and/
    or the ordinary shares at levels which might not otherwise prevail. Such
    stabilisation, if commenced may be discontinued at any time.
10. This press release does not constitute an offer of, or an invitation by or
    on behalf of Legal & General Group Plc, UBS Warburg or Goldman Sachs
    International to subscribe for or purchase, any of the convertible bonds
    or ordinary shares of Legal & General Group Plc.
11. The information contained herein is not for distribution in the United
    States, Canada or Japan. The convertible bonds may not be offered or sold
    in the United States unless they are registered under applicable law or
    exempt from registration. The convertible bonds referred to herein have
    not, and will not, be registered under the U.S. Securities Act of 1933 and
    may not be offered or sold, subject to limited exceptions, directly or
    indirectly into the United States.