Rec.Offer by Nat.West - Pt.3

LEGAL & GENERAL GROUP PLC
6 September 1999

PART 3
                       APPENDIX II

              Particulars of the Loan Notes
The  Loan  Notes  will  be constituted  by  a  loan  note
instrument  (the  'Loan  Note Instrument'),   which  will
contain  provisions, inter alia, to the following effect.
The  issue of the Loan Notes will be conditional  on  the
Offer  becoming  or being declared unconditional  in  all
respects.  Elections for Loan Notes  in  respect  of  the
maximum  cash  consideration receivable under  the  basic
terms   of   the  Offer  would  involve  the   issue   of
approximately  £4.35 billion in nominal  amount  of  Loan
Notes. This amount ignores any additional cash payable by
NatWest in respect of compulsory purchases under sections
428-430F  of  the  Act.  The Loan  Note  Instrument  will
contain  provisions, inter alia, to the  effect  set  out
below:

1.   Form, status, registration and transfer

    The  Loan Notes will be issued in registered form  in
    integral   multiples   of   £1   nominal,   will   be
    transferable    without   restriction,    and    will
    constitute  unsecured  obligations  of  NatWest.  The
    Loan   Note   Instrument   will   not   contain   any
    restrictions  on borrowings or charging  or  disposal
    of assets by NatWest.
    
2.   Interest

    (a)  Interest on the outstanding Loan Notes  will  be
         payable (subject to any requirement to deduct or withhold
         tax therefrom) by twice yearly instalments in arrears on
         30 June and 31 December in each year or, if such a day is
         not a business day, on the next following business day
         ('interest payment dates').  The first payment of
         interest on the Loan Notes will be made on 30 June 2000
         in respect of the period from (and including) the date of
         issue up to (but excluding) 30 June 2000 ('first interest
         period').  The period from (and including) 30 June 2000
         or any subsequent interest payment date up to (but
         excluding) the next following interest payment date is
         herein called an 'interest period'.
    (b)  The  rate of interest on the Loan Notes for each
         interest period will be the rate per annum which is 1 per
         cent. below applicable LIBOR.  LIBOR means the arithmetic
         mean of the respective rates which are quoted on the
         'LIBP' page on the Reuter Monitor Money Rates Service (or
         such other page or service as may replace the LIBP page
         or such system for the purpose of displaying London
         Interbank Offered Rates of leading banks) (rounded down
         where necessary to the nearest whole multiple of one-
         sixteenth of one per cent.) for six months sterling
         deposits at or about 11.00 a.m. on the first Business Day
         of the relevant interest period.
    (c)  If LIBOR cannot be established in accordance with
         the provisions of paragraph 2(b) above for any interest
         period, then LIBOR for the calculation of the rate of
         interest in such interest period shall be calculated by
         reference to such rate as HSBC Holdings PLC, or failing
         which, Lloyds TSB plc or, failing which, Barclays Bank
         PLC, or failing which, a London clearing bank nominated
         by NatWest shall reasonably determine on the basis of
         quotations made for six months deposits of similar size
         and currency on any inter-bank market or market as such
         bank shall reasonably select.  If LIBOR cannot be
         established in accordance with the provisions of the
         preceding sentence for any interest period, then the rate
         of interest for such interest period shall be the same as
         that during the previous interest period.
    (d)  Each instalment of interest shall be calculated on
         the basis of a 365 day year and the number of days
         elapsed in the relevant interest period.
    
3.   Repayment of the Loan Notes
    
    (a)  Any Loan Notes not previously repaid or purchased or
         cancelled under this paragraph or paragraphs 4, 5 or 6
         below will be redeemed in full at par on 31 December 2005
         (the 'Final Redemption Date') together with accrued
         interest (less any applicable tax) up to (but excluding)
         that date.
    (b)  A Noteholder may require all or any part (being £100
         in nominal amount or any integral multiple thereof) of
         his holding of Loan Notes to be repaid at par together
         with accrued interest up to but excluding the date of
         payment (less any applicable tax) on any interest payment
         date (such date to be not less than one year from the
         date of issue of the Loan Notes) falling prior to the
         Final Redemption Date by giving not less than thirty
         days' notice in writing to expire on or before the
         relevant interest payment date accompanied by the
         relevant Loan Note.
    (c)  If, at any time on or after 31 December 2000, 75 per
         cent. in nominal value of the Loan Notes has been repaid
         or purchased and cancelled or £5 million or less in
         nominal value of Loan Notes is outstanding, NatWest shall
         have the right, on giving to the remaining Noteholders
         not less than thirty days' notice in writing, to redeem
         all (but not some only) of the outstanding Loan Notes by
         payment of the nominal value thereof together with
         accrued interest up to but excluding the date of payment
         (less any applicable tax).
    
4.   Repayment on default
    
    Each  Noteholder will be entitled to require  all  or
    any  part  (being £1 nominal amount or  any  integral
    multiple  thereof) of the Loan Notes held by  him  to
    be  repaid  at par together with accrued interest  up
    to  but  excluding  the  date of  payment  (less  any
    applicable tax) if:
    (a)   any principal or interest on any of the Loan Notes
          held by that Noteholder shall fail to be paid in full
          within thirty days after the due date for payment
          thereof; or
    (b)   an  order is made or an effective resolution  is
          passed for the winding up or dissolution of NatWest
          (other than a voluntary winding up for the purposes of
          amalgamation or reconstruction or a members' voluntary
          winding up on terms previously approved  by  an
          Extraordinary Resolution of Noteholders (as defined in
          the Loan Note Instrument)); or
    (c)  an encumbrancer takes possession of or a trustee,
          receiver, administrator or similar officer is appointed
          or an administration order is made in respect of NatWest
          or in respect of the whole or substantially the whole of
          the undertaking or property of NatWest and such person
          has not been paid out or discharged within thirty days.
    
5.   Purchase of the Loan Notes
    
    NatWest  may at any time purchase any Loan  Notes  by
    tender  (available to all Noteholders  alike)  or  by
    private treaty or otherwise at any price.

6.   Cancellation
    
    Any  Loan  Notes  repaid, redeemed  or  purchased  as
    referred  to above shall be cancelled and  shall  not
    be available for re-issue.
    
7.   Additional Notes
    
    Each  Noteholder shall have the right on giving sixty
    days'  prior written notice to expire on any interest
    payment  date  (other  than  31  December  2005)   to
    NatWest  to acquire (by subscription at their nominal
    value   of  an  amount  up  to  or  equal   to   such
    Noteholder's  holding of Loan Notes, such  amount  to
    be  payable in full on subscription) additional  loan
    notes  to  be  issued  by  a  subsidiary  of  NatWest
    ('Additional   Notes')   on  terms   and   conditions
    substantially  the  same as those applicable  to  the
    Loan  Notes,  except that the Additional Notes  shall
    not   carry   any   right   to   acquire   additional
    securities.   The rate of interest on the  Additional
    Notes  shall be the same rate of interest as  on  the
    Loan  Notes and NatWest shall procure that the issuer
    of  the Additional Notes shall have a net worth equal
    to  or  more  than  the value of the  Offer  for  the
    period  from  the  date of issue  of  the  Additional
    Notes  until and including the date on which all  the
    Additional  Notes  are redeemed  or  repaid  (or,  at
    NatWest's option, NatWest may provide a guarantee  of
    the  Additional Notes if the issuer of the Additional
    Notes does not have such a net worth).
    
8.   Modifications
    
    The  provisions of the Loan Note Instrument  and  the
    rights   of   Noteholders   will   be   subject    to
    modification,   abrogation  or  compromise   in   any
    respect   with   the  sanction  of  an  Extraordinary
    Resolution  of  the Noteholders with the  consent  of
    NatWest.
    
9.   Further Loan Notes
    
    Provision  will  be made in the Loan Note  Instrument
    to  enable  NatWest to make further  issues  of  loan
    notes  so  as to form a single series with  the  Loan
    Notes.
    
    
10.  Listing
    
    No  application has been or is intended  to  be  made
    for  the Loan Notes to be listed or dealt in  on  any
    stock exchange.
    
11.  Governing Law
    
    The Loan Notes and the Loan Note Instrument will be
    governed by and construed in accordance with English
    law.


Footnotes for Document

1 on the basis of a NatWest Share price of 1143p (being
the closing middle market price on Friday, 3 September
1999) and assuming final terms of 0.10936 of a New
NatWest Share per Legal & General Share.
1 being the closing middle market price of a NatWest
Share on Thursday, 2 September 1999, the day before
announcement of talks between NatWest and Legal &
General.
2 being the closing middle market price of a NatWest
Share on Friday, 3 September 1999, the last dealing day
before announcement of the Offer.

1 NatWest Group costs for 1998, excluding disposals,
revenue investment and restructuring were £4,055 million.
2 NatWest UK costs (excluding revenue investment and
restructuring) for 1997 were £2,439 million (including
restatements for certain businesses transferred).
1 EPI is calculated as new annual premiums plus one tenth
of single premiums and does not include sales of unit
trusts, PEPs and ISAs.
1 These amounts are expected to be generated by the end
of 2002.
2 The pro forma adjustments have been tax effected at the
standard rate of UK corporation tax for each period, as
appropriate
3 Average equity is based upon NatWest's average equity
plus £6.4 billion arising from the satisfaction of the
purchase consideration