Global Investments
International Limited

EAGLE STAR INTERNATIONAL LIFE
GLOBAL BOND - SERIES TWO

Its aims are to provide a return dependent upon the stock performance of eight major companies, with a guaranteed minimum overall payment of 90 % of your original investment on completion of the full five year and four month term. 

Your commitment
To invest a single sum of at least USD 20,000 by 17 May 2002, and to be prepared to hold your bond until 28 September 2007.

What is the Global Bond - Series Two?
The Global Bond Series Two is a US Dollar single premium life insurance policy where investment returns are linked to the stock performance of eight major companies. Eagle Star International Life Limited guarantees that at the maturity date the bond will return the higher of:

• 90 % of the original investment or
• an amount higher than this depending upon the performance of four major US and four major HK companies.

Provided that you hold the investment for the full term you are guaranteed to receive a minimum return of 90 % of the original investment. Any termination or withdrawal before its maturity is fully exposed to fluctuations in the value of the underlying assets. The guarantee is provided by Eagle Star (International Life) Limited.

What is the underlying asset?
The underlying asset will be an equity linked note from a major AA-rated investment bank. This note has been designed specifically for Eagle Star International Life. The value of your bond will be directly linked to the value of the underlying asset; the equity linked note which is comprised of fixed interest securities and options. The value of the note at maturity is described in the section "How is the performance at maturity calculated". The option strategy will be related to the performance of stocks of eight major companies.

What are the eight major companies?
The bond's value at the end of the term will be dependent upon the performance of these eight companies (listed in the following Stock Exchanges):

• Merck & Co., Inc. is a global pharmaceutical company that discovers, develops, manufactures and markets a broad range of human and animal health products. The Company also provides pharmaceutical benefit services. Merck's products include Zoor, a treatment for elevated cholesterol, Pepcid anti-ulcerant, Primaxin antibiotic, and Propecia, a treatment for male pattern hair loss.
  
  Stock Exchange Listing: NYSE; www.merck.com
  
  
• Microsoft Corporation develops, manufactures, licenses, sells and supports software products. The Company offers operating system software, server application software, business and consumer applications software, software development tools, and Internet and intranet software. Microsoft also develops the MSN network of Internet products and services.
  
  Stock Exchange Listing: NASDAQ; www.microsoft.com/msft
  
  
• General Electric Company develops, manufactures and markets products for the generation, distribution and utilization of electricity. The Company, through General Electric Capital Services, Inc., offers a variety of financial Services including mutual fund management, financing, asset management and insurance. General Electric also owns the National Broadcasting Company. 
  
  Stock Exchange Listing: NYSE; www.ge.com/investor/
  
  
• Intel Corporation designs, manufactures and sells computer components and related products. The Company's major products include microprocessors, chipsets, embedded processors and microcontrollers, flash memory products, graphic products, network and communications products, systems management software, conferencing products and digital imaging products. 
  
  Stock Exchange Listing: NASDAQ; www.intel.com/index.htm
  
  
• HSBC Holdings Plc. is the holding company for the HSBC Group. The Company provides a variety of international banking and financial services, including retail and corporate banking, trade, trusteeship, securities, custody, capital markets, treasury, private and investment banking, and insurance. The Group operates worldwide.
  
  Stock Exchange Listing: Hong Kong; www.hsbcgroup.com
  
  
• China Mobile (Hong Kong) Limited, through its subsidiaries, provides cellular telecommunication services in the People's Republic of China. 
  
  Stock Exchange Listing: Hong Kong; www.chinamobilehk.com
  
  
• Cheung Kong (Hong Kong) Limited, through its subsidiaries, develops and invests in real estate. The Company also provides real estate agency and management services, operates hotels and invests in securities. 
  
  Stock Exchange Listing: Hong Kong; www.cheungkong.com/index2.htm
  
  
• Hutchinson Whampoa Limited, through its subsidiaries, operates five core businesses including ports and related services, telecommunications and e-commerce, property and hotels, retails and manufacturing, and energy, infrastructure, finance and investments. 
  
  Stock Exchange Listing: Hong Kong; www.hutchinson-whampoa.com/eng/investor.htm

Before maturity the value of the equity linked note will be calculated every two weeks by the investment bank according to market conditions at the time. The valuation will depend upon various market forces: Movement in interest rates, the volatility of the eight stocks, the correlation of the volatility of the eight stocks, whether any coupons have been paid to date and the presence of an active market for that portion of the note. As a consequence of certain extraordinary events affecting the nature of the selected stocks, such as but not restricted to, mergers, de-listing, insolvency or stock splits, the Company's Actuary may substitute the stock or make an adjustment to its value in line with any adjustment to the underlying investments held by the Company to meet its obligations to provide Benefits under the Policy and in keeping with normal market practice. Should this happen, all investors will be notified in writing within 30 days. 

When can I invest?
You can invest between 8 April and 17 May 2002. Your policy will be issued before 5 June. This offering is conditional upon Eagle Star receiving a minimum subscription of USD 8 million prior to the close of the offer on 17 May 2002. Eagle Star will also close the offer to additional business if USD 50 million is received due to high demand. A decision on over-subscription will be made when the maximum limit is received. In this instance your investment amount will be returned to you within seven days. If the Series is under-subscribed or, your application (including payment) is received after the offer is closed, your investment amount will be returned to you within seven days of the close of the offer or the date of receipt of your application, whichever is the later. No interest will be added. 

How is the performance at maturity calculated?
The bond term of five years and four months is divided into eight periods of eight months each.

At the start of each period the official Stock Exchange price for each stock is recorded. This forms the initial opening price. Provided that the daily closing price of all of the eight stocks does not fall more than 14 % of their opening price at any time during the eight-month period then a coupon of between 13 % and 16 % will be earned by the bond. A coupon will not be paid if one stock falls more than 14 % from the opening price, during the period, even if it subsequently recovers and grows in that period. Where one stock falls more than 14 % the coupon for that period will not be paid irrespective of the performance of the other seven stocks.

The coupon will be a minimum of 13 % and a maximum of 16 % of the whole of the original lump sum investment. The coupon rate will depend on the costs of the underlying assets purchased when your policy is issued then confirmed in the policy document. If it is not possible to achieve a coupon rate of at least 13 % per period then your money will be returned in full within seven days of the decision and in any case before 5 June 2002. No interest will be added.

At the end of the eight-month period the closing prices of the stocks on that day are taken as the opening prices for the following period and the process repeats itself.

At the end of the five year and four month period the minimum guaranteed return is 90 % of the total investment. The value of all the coupons earned will be added to 90 % of the original lump sum investment at the end of the term to determine the value of your bond. All the coupon rates are constant throughout the eight periods. The coupon rates are calculated by Eagle Star International Life. Coupon rate will not be compounded and coupon payments do not earn interest during the term.

In the case where the closing daily prices of all of the eight stocks are not more than 14 % lower than their corresponding opening prices of the respective eight month period, the possible final returns are set out as follows:

No growth is required to achieve a coupon of 13 % to 16 % (equivalent to an annual coupon of 19.5 % to 24 %). Potentially eight coupons of 13 % to 16 % would be paid making the maximum total return (capital plus return) at the end of the term 194 % to 218 %.

By breaking the investment period into eight month periods, the stock performances of the eight major companies are measured over a smaller timeframe and this may potentially lower the risk of the market experiencing a sharp fall in all eight periods and thus reduce the effect of any single drop in markets over the total investment period.

The opening and closing periods are as shown below:
Period 1 - open date 29/05/02 close date 29/01/03
Period 2 - open date 29/01/03 close date 29/09/03
Period 3 - open date 29/09/03 close date 28/05/04
Period 4 - open date 28/05/04 close date 31/01/05
Period 5 - open date 31/01/05 close date 29/09/05
Period 6 - open date 29/09/05 close date 30/05/06
Period 7 - open date 30/05/06 close date 29/01/07
Period 8 - open date 29/01/07 close date 28/09/07

What are the charges?
100 % of your money will be invested at the outset. There is an annual management charge of 2.16 % p.a. of the investment account. In the event of a surrender before the end of the five year four month term, then any outstanding charges due for the remaining term will be deducted based on the last outstanding balance in the investment account.

The value of your investment will be the open market price of the underlying assets backing this Policy, adjusted for the outstanding management fee described under "What are the charges?" above. Other than this fee, there are no charges at surrender.

*This also applies to a death claim

When can I get a performance update?
A valuation will be provided after the end of every eight month period.

Can I take income from my bond?
No. Regular withdrawals are not permitted under the terms and conditions of this offer.

What happens if I cash in early?
The value will be determined by market conditions, which cannot be determined in advance and are not guaranteed. If you cash in early you will suffer a surrender penalty and could get back less than you initially invested.

What happens if I die?
In the event of a Death Claim arising, Eagle Star International Life will pay 101% of the surrender value of the bond, on receipt of proof of the death of the Life Insured (or the last life in Joint Life Insured cases).

The surrender value of the bond will reflect that all future annual management charges have been deducted. 

Risk factors:

• The Global Bond does not represent a diversified investment. It is a fixed term investment and you are not able to change the investment strategy during the term. The growth over the guaranteed minimum return of 90 % of your original investment is directly related to the volatility of the eight stocks.
  
  
• If you cash in or cancel your bond during the term, or cancel your investment after the offer period, you may get back less than the guaranteed return of 90 % of your original investment and the annual management fee over the remaining term of the policy will also be deducted from the surrender value.
  
  
• This bond is suitable only if you can leave your investment for the full five year and four month period, otherwise you may get back only a proportion of your initial investment, depending of the value of the underlying asset. Investors may still suffer loss at maturity if no coupons are paid throughout the investment periods. If at the end of the terms not one of the eight period earns a coupon then your return will be 90 % of the original investment.
  
  
• Investors are always advised to take the fluctuations of geographical spread, specific market and industry conditions into account before making any investment decisions.
  
  
• The potential capital gain is fixed at the prescribed coupon rate even if the 8 companies perform better over the period.
  
  
• The guarantee is dependent on Eagle Star International Life being able to meet its obligations. Eagle Star International Life Limited is part of the Zurich Financial Services Group which has USD 415.75 billion under management (as at 30.06.01). Policyholders will be protected by the Isle of Man Policyholder Protection Act 1991 if the company should be unable to meet its liabilities.
  
  
• To avoid the potential delays associated with foreign exchanges and cheque payments, it is recommended that payments are made electronically in US Dollars. We are also pleased to accept Hong Kong Dollar cheques drawn on banks in the Hong Kong clearing system. A Telegraphic Transfer form is attached to the Application Form.
  
  
• If you invest more than GBP 225,000 (or currency equivalent) you will need to complete a Source of Funds Questionnaire at the time of application. A copy of this document may be enclosed with the application, or can be supplied by request from our Hong Kong administration office. Any application form received without this form (where required) may be delayed due to the non-receipt and result in your missing the Offer Closing Date.

WARNING: Please note that your bond will be denominated in US Dollars. If you do not forward your investment in US Dollars, it will be converted on receipt. If you then decide to cancel, your investment will be returned in US Dollars. 

Please contact Global Investments for more information
on Tel. (+66-2) 662-2009 or e-mail at info@globalinv.org.