Standard & Poor's Cuts Phoenix Home Life Group Members Ratings; Outlook Stable

Apr 30, 2001, 01:00 ET from Standard & Poor's

    NEW YORK, April 30 /PRNewswire/ -- Standard & Poor's today lowered its
 counterparty credit and financial strength ratings on Phoenix Home Life Mutual
 Insurance Co. (PHL) and its subsidiaries, all members of the Phoenix Home Life
 Group (Phoenix; see list), to double-'A'-minus from double-'A', and its
 subordinated debt rating on PHL to single-'A' from single-'A'-plus. The
 outlook has been revised to stable from negative.
     This rating action reflects the belief that the company's strategic focus
 on nonparticipating products will present challenges and, without high growth,
 it will be difficult for the company to meet Standard & Poor's earnings
 expectations. Standard & Poor's review of the most recent financial
 information, including growth in net assets within the company's asset
 management segment and GAAP earnings, supports the current ratings.
     Major Rating Factors:
 
     -- The company has a strong business position reflecting competitive
        products, good growth, strong market presence, and the ability to
        effectively manage multiple distribution channels. Although the company
        has successfully shifted the main focus of its life sales to
        nonparticipating products, Standard & Poor's believes that, given the
        size of its participating block, the transition to stronger
        profitability in the nonparticipating line will remain in process for
        some time.
     -- Performance at the organization's asset-management subsidiary, Phoenix
        Investment Partners (formerly known as Phoenix Duff and Phelps), has
        been below expectations in asset growth and earnings.
     -- Earnings continue to reflect operational performance below Standard &
        Poor's expectations.
     -- As of year-end 1999, combined capital is considered extremely strong
        relative to risk with a ratio of 290% based on Standard & Poor's
        risk-based capital model, further displaying good growth over the past
        five years. Liquidity, at 263% as measured by Standard & Poor's
        liquidity model, is extremely strong.
 
     OUTLOOK: STABLE
     Pretax GAAP earnings, relative to risk, are expected to improve to a level
 consistent with the current rating by year-end 2002. New life insurance
 business is expected to increase 10%-15% per year. Net sales of variable
 annuities for 2001 are expected to be positive. Capital and liquidity will
 remain at levels consistent with the rating, Standard & Poor's said. --
 CreditWire
 
     OUTSTANDING RATINGS LOWERED          TO              FROM
     MEMBERS OF THE PHOENIX HOME LIFE GROUP:
     Phoenix Home Life Mutual Insurance Co.
       Counterparty credit rating         AA-/Stable/A-1+  AA/Neg
       Financial strength rating          AA-              AA
       Subordinated debt rating           A                A+
     PHL Variable Insurance Co.
     Phoenix Life and Annuity Co.
     American Phoenix Life & Reassurance Co.
     Phoenix Life and Reassurance Co. of NY
     AGL Life Assurance Co.
       Counterparty credit rating         AA-/Stable/A-1+  AA/Neg
       Financial strength rating          AA-              AA
 
 

SOURCE Standard & Poor's
    NEW YORK, April 30 /PRNewswire/ -- Standard & Poor's today lowered its
 counterparty credit and financial strength ratings on Phoenix Home Life Mutual
 Insurance Co. (PHL) and its subsidiaries, all members of the Phoenix Home Life
 Group (Phoenix; see list), to double-'A'-minus from double-'A', and its
 subordinated debt rating on PHL to single-'A' from single-'A'-plus. The
 outlook has been revised to stable from negative.
     This rating action reflects the belief that the company's strategic focus
 on nonparticipating products will present challenges and, without high growth,
 it will be difficult for the company to meet Standard & Poor's earnings
 expectations. Standard & Poor's review of the most recent financial
 information, including growth in net assets within the company's asset
 management segment and GAAP earnings, supports the current ratings.
     Major Rating Factors:
 
     -- The company has a strong business position reflecting competitive
        products, good growth, strong market presence, and the ability to
        effectively manage multiple distribution channels. Although the company
        has successfully shifted the main focus of its life sales to
        nonparticipating products, Standard & Poor's believes that, given the
        size of its participating block, the transition to stronger
        profitability in the nonparticipating line will remain in process for
        some time.
     -- Performance at the organization's asset-management subsidiary, Phoenix
        Investment Partners (formerly known as Phoenix Duff and Phelps), has
        been below expectations in asset growth and earnings.
     -- Earnings continue to reflect operational performance below Standard &
        Poor's expectations.
     -- As of year-end 1999, combined capital is considered extremely strong
        relative to risk with a ratio of 290% based on Standard & Poor's
        risk-based capital model, further displaying good growth over the past
        five years. Liquidity, at 263% as measured by Standard & Poor's
        liquidity model, is extremely strong.
 
     OUTLOOK: STABLE
     Pretax GAAP earnings, relative to risk, are expected to improve to a level
 consistent with the current rating by year-end 2002. New life insurance
 business is expected to increase 10%-15% per year. Net sales of variable
 annuities for 2001 are expected to be positive. Capital and liquidity will
 remain at levels consistent with the rating, Standard & Poor's said. --
 CreditWire
 
     OUTSTANDING RATINGS LOWERED          TO              FROM
     MEMBERS OF THE PHOENIX HOME LIFE GROUP:
     Phoenix Home Life Mutual Insurance Co.
       Counterparty credit rating         AA-/Stable/A-1+  AA/Neg
       Financial strength rating          AA-              AA
       Subordinated debt rating           A                A+
     PHL Variable Insurance Co.
     Phoenix Life and Annuity Co.
     American Phoenix Life & Reassurance Co.
     Phoenix Life and Reassurance Co. of NY
     AGL Life Assurance Co.
       Counterparty credit rating         AA-/Stable/A-1+  AA/Neg
       Financial strength rating          AA-              AA
 
 SOURCE  Standard & Poor's