to a Bermuda-headquartered company, home will one day be where the ship is.

The Centre group of companies, a member of the Zurich Financial Services Group, announced yesterday that it has provided an innovative insurance guarantee to ResidenSea Ltd., enabling ResidenSea to secure financing for the construction of the world's first residence/cruise vessel.

The vessel, to be completed in the year 2001, will contain 110 luxury residences that will be sold to individuals at prices ranging from $2 million to $6.8 million (43 have been sold to date).

The Centre insurance guarantee, which took the form of a surety bond, enabled ResidenSea to transfer the risk of a sales shortfall of the units during the construction phase, as well as to secure a portion of contingent financing.

The contingent financing becomes effective only if the sale of all 110 residential units is not achieved during the construction period. If the contingent financing is called, reduced cash flows will restrict ResidenSea's ability to pay off the loan obligations, at which point Centre takes on that obligation.

The contingent financing represents $260 million out of the total project cost of $355 million.

In the transaction, Centre maintains the credit risk support of the contingent equity and junior loan until the delivery of the ship in 27 months. Centre also provides the shipyard, Norway's Fosen Mek Verksteder A /S, with assurance that the vessel will be paid for.