A.M. Best Assigns Debt Rating to Delphi Financial Group's Forthcoming Junior Subordinated Debentures.

OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "bb+" to the forthcoming $150 million junior subordinated debentures with a scheduled maturity of 30 years to be issued by the Delphi Financial Group, Inc. (Delphi) (Wilmington, DE) [NYSE:DFG]. The rating outlook is stable.

Proceeds from the current securities offering will be used to reduce outstanding debt at the revolving credit facility, which has a remaining term of less than five years. The proceeds from the credit facility were applied earlier in 2007 toward retirement of Delphi's 2027 capital securities. The debentures will also provide more adequate support for growth opportunities at the operating company level.

The debentures have a scheduled maturity of 30 years, a final maturity of 60 years, are non-callable at par for the first 10 years and are subject to a Replacement Capital Covenant (Covenant). The Covenant restricts replacement of the debentures for the first 40 years redeemable only with securities, which carry similar "equity like" characteristics.

The rating reflects the intended subordination of these securities to all of Delphi's existing and future debt obligations, including guarantees and trust preferred securities. Delphi maintains an unadjusted debt and preferred stock-to-capital ratio of approximately 23% and favorable coverage ratios. The organization's insurance entities continue to report solid operating results.

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Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.