Fitch Affirms Great-West's Ratings Following Announcement of Putnam Acquisition.

CHICAGO -- Fitch Ratings affirmed Great-West Lifeco's (TSE:GWO) 'AA-' Issuer Default Rating (IDR), as well as the ratings on all its outstanding debt and preferred stock. Fitch affirmed the 'AA+' insurer financial strength (IFS) ratings of all operating subsidiaries (see below for a complete listing of all ratings). The Rating Outlook is Stable.

The rating actions follow today's announcement that GWO has reached a definitive agreement to acquire for cash the stock of Putnam Investments (Putnam) and its subsidiaries. Putnam will be operated as a separate business unit of GWO and managed by Putnam's existing management team. Putnam will be a subsidiary of GWO's U.S. holding company, Great-West Life & Annuity Financial Inc. and a sister to GWO's U.S. life insurance operating company, Great-West Life & Annuity Insurance Co. (GWLA).

The affirmation of the ratings reflects that at less than 10% of GWO's pro forma earnings and shareholders' equity, Putnam does not materially alter GWO's profile. Fitch is also comfortable with the range of alternatives available to GWO in funding the US$3.9 billion purchase price. Under the various alternatives, the RBC of GWLA, the MCCSR of Great-West Life Assurance Company (GWL) and the MCCSR of the consolidated company remain within ratings expectations. Although equity-credit-adjusted leverage will increase under all financing scenarios, it is expected to remain within ratings expectations. Fitch notes that the new goodwill and additional financial leverage from the Putnam acquisition may affect GWO's financial flexibility for future acquisition activity. Fixed charge coverage under the most conservative financing scenario is expected to decline for a period of about 18 months according to GWO's projections, before returning to the range reported most recently of 9.4 times (x) for the first nine months of 2006.

For GWO's ratings strengths and concerns please refer to the Fitch press release affirming all ratings on Dec. 20, 2006, as well as full Rating Reports published on GWLA on Jan. 4, 2007 and on GWL on Jan. 16, 2007. All research is available on the Fitch Ratings web site at www.fitchratings.com.

Fitch affirms the following ratings with a Stable Outlook:

Great-West Lifeco, Inc.

-- Issuer Default Rating at 'AA-'

-- 6.75% senior debentures due Aug. 10, 2015 at 'A+';

-- 6.14% senior debentures due March 21, 2018 at 'A+';

-- 6.74% senior debentures due Nov. 24, 2031 at 'A+';

-- 6.67% senior debentures due March 21, 2033 at 'A+';

-- Series D 4.70% non-cumulative first preferred shares at 'A';

-- Series E 4.8% non-cumulative first preferred shares at 'A';

-- Series F 5.9% non-cumulative first preferred shares at 'A';

-- Series G 5.20% non-cumulative first preferred shares at 'A';

-- Series H 4.85% non-cumulative first preferred shares at 'A';

-- Series I 4.5% non-cumulative first preferred shares at 'A'.

Great-West Life & Annuity Financial Inc.

-- Issuer Default Rating at 'AA-'.

Great-West Life & Annuity Insurance Capital, LP

-- 6.625% deferrable debentures due Nov. 15, 2034 at 'A'.

Great-West Life & Annuity Insurance Capital, LP II

-- 7.153% subordinated debentures due 2046 at 'A'.

Canada Life Financial Corporation

-- Issuer Default Rating at 'AA-';

-- Series B 6.25% noncumulative preferred shares at 'A'.

Great-West Life Assurance Company

-- Insurer financial strength at 'AA+';

-- Issuer default at 'AA';

-- Series L 5.20% noncumulative preferred shares at 'AA-';

-- Series O 5.55% noncumulative preferred shares at 'AA-'.

Great-West Life Capital Trust

-- Series A 5.995% senior debentures due Dec. 31, 2052 at 'AA-'.

Canada Life Assurance Company

-- Insurer financial strength at 'AA+';

-- Issuer Default Rating at 'AA';

-- 5.8% subordinated debentures due Dec. 11, 2013 at 'AA-';

-- 6.4% subordinated debentures due Dec. 11, 2028 at 'AA-'.

Canada Life Capital Trust

-- Series A 6.679% senior debentures due June 30, 2052 at 'AA-';

-- Series B, 7.529% senior debentures due June 30, 2052 at 'AA-'.

Fitch affirms the following insurance subsidiaries' IFS ratings at 'AA+' with a Stable Outlook:

-- London Life Insurance Company;

-- Great-West Life and Annuity Insurance Company;

-- First Great-West Life & Annuity Insurance Company;

-- Canada Life Insurance Company of America.

Fitch affirms the following insurance subsidiaries' commercial paper issuer ratings at 'F1+':

-- London Life Insurance Company;

-- Great-West Life and Annuity Insurance Company.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.