TCW Debt Fund

completed

Quasi-Equity investment of up to $30 million in GEM VII Targeted Value Debt Fund (the fund or the company). The proposed fund is a closed-end special purpose vehicle, structured as a Collateralized Bond Obligation (CBO), which will invest in emerging market debt issues. The fund is structured to offer investment opportunities both to existing emerging markets investors and to credit-quality sensitive institutional investors who can only invest in investment-grade instruments. The fund is expected to be at least 70% invested in 30 countries at closing in June 2003, in a globally diversified portfolio of US dollar denominated debt issues from emerging markets. Against the assets of the fund, three classes of obligations: - Senior Notes, - Second Priority Notes, and - Preference Shares - are expected to be issued in an amount of $400 million. The Senior and Second Priority Notes will be over-collateralized and credit-enhanced by the Preference Shares and are targeted to receive a higher investment grade rating of Aa2 and Baa2 from Moody's, and AA and BBB- from S&P, respectively. The Senior Notes will be wrapped by a monoline insurer guarantee to achieve a rating of Aaa/AAA. The fund will invest in emerging market corporate, quasi-sovereign, and sovereign debt securities and is a vehicle designed to support the World Bank Group strategy of promoting the development of corporate debt markets in the member developing countries.