When Unitas Finance Ltd. wanted to refinance its $200 million finance lease portfolio of transportation equipment this spring, its executives did not go to bankers to structure the deal - they went to Centre Solutions, an insurance company.

Centre Solutions, a 13-year-old subsidiary of Zurich Financial Group, specializes in making complex financial deals palatable to traditional sources of funding; it straddles the line between banking and insurance.

"We are an insurance-based risk assumer and capital provider," said David Wasserman, president and chief executive officer. That is, it backs up loans that traditional lenders might find too risky or unwieldy. The product is insurance, but the end result is a loan.

Centre Solutions, which is based in Bermuda and has offices in New York, London, Hong Kong, Sydney, Zurich, Dublin, and San Francisco, also provides customized reinsurance, alternative risk transfer, and finite risk insurance. That allows the client to share in the underwriting profits of a successful program.

In the Unitas deal, Centre was able to guarantee that the cargo-container firm would meet its debt repayments even with insufficient cash flow. The guarantee helped Unitas, which is also based in Bermuda, get funds to build its business.

"Typically our clients are all over the map geographically and by industry," Mr. Wasserman said. "The common factor is that the underlying transaction is either complicated or in an underserved market or a distressed market."

"We do relatively few, moderately large, highly structured, complicated transactions," he said. Centre has worked on a variety of deals, including a credit enhancement program for a Latin American airline, the construction of a power plant in Colombia, and the financing of the acquisition of 20 assisted-living facilities by HCR Manorcare.

Centre also owns a number of smaller, niche firms such as ZC Sterling, which handles homeowner insurance problems for banks. (See article on this page.)

Centre clients are having trouble getting financing because of the complexity or location of their operations, according to Mr. Wasserman. Instead of spending a year trying to prove to traditional lenders that they can repay the loan, they have it secured by Centre, a top-rated insurer. In exchange, Centre will take part of the spread on the loan and some equity in the company or operation looking for financing.

In many of the deals, "we enable the underlying project to happen, so it's nice for us to get part of our fee as equity," Mr. Wasserman said. "Because we helped to facilitate the project, we want to share in the success."

Centre handled 78 transactions in 1999, its biggest year ever, but Mr. Wasserman said he does net want its transaction volume to top 100.

"There are only so many you can do," he said, noting that the company only takes on about 6% of the projects it is presented with. Centre will walk away for a number of reasons, such as when the banks have valid concerns about financing the venture. Centre also likes to structure deals where the client takes a certain portion of the risk.

A recent report on Zurich Financial by Morgan Stanley Dean Witter highlighted Centre's contribution, saying: "We have previously called Farmers the jewel in the ZFS group, but we wonder if the people running Centre Solutions may be offended by that. Not because Farmers is not a jewel in itself, but because Centre Solutions' earnings capacity is exceptionally strong, we think."

Centre Solutions is rated Aa3 by Moody's. In 1999 it had net income of $182 million on revenue of $623 million.

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