A.M. Best Affirms TIAA Financial Strength and Debt Ratings; Assigns Issuer Credit Ratings to Operating Companies.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A++ (Superior) and has assigned issuer credit ratings (ICR) of "aaa" to Teachers Insurance and Annuity Association of America (TIAA) and its insurance operating subsidiary, TIAA-CREF Life Insurance Company (TIAA-CREF). Concurrently, A.M. Best has affirmed the debt ratings of "aaa" on the senior unsecured notes issued by TIAA Global Markets Inc. (TGM) and the debt rating of AMB-1+ on TIAA's $2 billion commercial paper program. All ratings have a stable outlook, and all companies are domiciled in New York, NY.

These rating affirmations reflect TIAA's superior capitalization, strong market position in its core higher education pension market, favorable earnings produced through its lean operating structure and significant economies of scale and its stable liability structure.

TIAA continues to build on its superior capital position through a regular stream of operating earnings derived from its stable pension business. TIAA, together with its companion organization, the College Retirement Equities Fund (CREF), has significant scale as one of the largest private retirement system in the United States, with combined assets under management of approximately $343 billion at year-end 2004. The group's low expense structure and effective distribution offer competitive advantages in its core pension market.

Partially offsetting these strengths is the challenge TIAA will face in maintaining its historical growth rate as well as the industry standard for low expenses. As part of its review, A.M. Best will continue to monitor the magnitude of a potential adverse tax reserve adjustment. TIAA also maintains a considerably higher exposure to real estate and alternative investment classes than most of the U.S. life insurance industry. However, the company has a very stable liability structure that serves to mitigate these risks. As a result, TIAA continues to maintain considerable latitude in managing its capital base, particularly given its stable liabilities and its ability to adjust policyholder crediting and dividend rates. Despite increasing competition in its core markets, A.M. Best anticipates that TIAA will continue to demonstrate competitive advantages that will allow it to maintain a strong market position in the higher education pension market.

The financial strength rating of A++ (Superior) has been affirmed and issuer credit ratings of "aaa" have been assigned to Teachers Insurance and Annuity Association of America and its subsidiary, TIAA-CREF Life Insurance Company.

The following debt ratings have been affirmed:

Teachers Insurance and Annuity Association of America--

--AMB-1+ on $2 billion commercial paper program

TIAA Global Markets, Inc.--

--"aaa" on $750 million 3.875% senior unsecured notes, due 2008

--"aaa" on $300 million floating senior unsecured notes, due 2006

--"aaa" on $200 million 2.75% senior unsecured notes, due 2006

--"aaa" on $500 million 4.125% senior unsecured notes, due 2007

--"aaa" on $500 million 5.00% senior unsecured notes, due 2007

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.

For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit http://www.ambest.com/lh.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.