Pirelli: 1 bln euro credit line re-negotiated

PIRELLI: 1 BLN EURO CREDIT LINE RE-NEGOTIATED

Maturity extended to 2010 and financial terms improved

Milan, 20 December 2005 - Pirelli & C. SpA has re-negotiated a committed revolving credit line of 1 billion euros, signed in December 2003 with Barclays Capital, BNP Paribas, HSBC Bank plc, J.P. Morgan plc and The Royal Bank of Scotland plc, as mandate lead arrangers.

Under the terms of the new agreement, the maturity of the credit line has been extended from 2008 to 2010, with the option for the financing banks to further extend the maturity up to 2012. Should the credit line be utilized, the margin would be halved from the original conditions to 50 basis points.

Such operation will optimize the Pirelli & C. SpA financial structure both in terms of costs and duration.

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