Fitch Raises Transamerica Finance Corp.'s Commercial Paper Rating.

Business Editors

NEW YORK--(BUSINESS WIRE)--Aug. 2, 2000

Fitch, the international rating agency formed by the merger of Fitch IBCA and Duff & Phelps Credit Rating Co., upgraded Transamerica Finance Corporation's (TFC) commercial paper rating, changed TFC's long-term debt rating Outlook to Positive from Stable and affirmed all AEGON USA Inc. (AEGON USA) ratings (see detailed list below).

The rating actions follow AEGON N.V.'s decision to retain TFC's non-insurance business and AEGON N.V.'s plans to extend its guarantee to TFC's commercial paper program.

The change in TFC's commercial paper rating to 'F1+' from 'F1' is based on AEGON N.V.'s unconditional and irrevocable guarantee of TFC's commercial paper going forward. TFC is expected to retain its current backup liquidity facilities of $4.5 billion for the near term. Fitch's ratings for TFC's long-term debt remain: senior debt 'A' and subordinated debt 'A-', with a Positive Rating Outlook for both.

The Positive Outlook is supported by the strength of TFC's ultimate parent, AEGON N.V. While no formal support agreement exists between TFC and AEGON N.V., AEGON N.V. has committed to maintaining debt-to-tangible equity at or below 6.5 times.

The affirmation of the AEGON USA, Commonwealth General and Transamerica Corporation's (TA) senior debt and preferred stock ratings reflects Fitch's view that the adjustments made to the ratings on July 21, 1999, encompassed the possibility that the non-insurance units could be retained by AEGON N.V., at least in the intermediate term, and that the financing requirements of the non-insurance business could become a more permanent part of AEGON N.V.'s capital structure.

AEGON N.V.'s credit quality is integral to AEGON USA's debt ratings as AEGON N.V. guarantees the debt assumed by AEGON USA with the purchase of the Commonwealth General and the commercial paper issued by a special-purpose subsidiary of AEGON USA, AEGON Funding Corporation, used to fund the purchase of TA. Although Fitch does not rate AEGON N.V., Fitch views AEGON N.V.'s financial strength and flexibility as very strong.

The affirmation of the insurer financial strength, commercial paper and short-term insurer financial strength ratings of AEGON USA's insurance subsidiaries continues to reflect the consolidated company's good capital position relative to insurance risks, established market position in a diverse group of businesses, the expertise and commitment of management of U.S.-based AEGON USA, strong liquidity and high-quality investment portfolio.

TA's insurance operations are managed by AEGON USA, despite being owned directly by AEGON, N.V., and therefore Fitch rates all the U.S. operations of AEGON USA as a group.

Rating Upgraded

-- Transamerica Finance Corporation -- Commercial Paper,'F1+'.

Fixed-Income Rating Outlook Positive

-- Transamerica Finance Corporation -- Senior Debt,'A'.

-- Transamerica Finance Corporation -- Subordinated Debt,'A-'.

Insurer Financial Strength Ratings Affirmed, Rating Outlook

Stable

-- AUSA Life Insurance Company Inc., 'AA+'.

-- Bankers United Life Assurance Company, 'AA+'.

-- Life Investors Insurance Co. of America, 'AA+'.

-- Monumental Life Insurance Company, 'AA+'.

-- PFL Life Insurance Company, 'AA+'.

-- Peoples Benefit Life Insurance Company, 'AA+'.

-- Western Reserve Life Assurance Co., 'AA+'.

-- Transamerica Occidental Life, 'AA+'.

-- Transamerica Life & Annuity, 'AA+'.

-- Transamerica Life of New York, 'AA+'.

-- Transamerica Life of Canada, 'AA+'.

S-T Insurer Financial Strength/Commercial Paper Ratings Affirmed,

Rating Outlook Stable

-- AUSA Life Insurance Company Inc., 'F1+'.

-- Monumental Life Insurance Company, 'F1+'.

-- Transamerica Occidental Life Insurance Company, 'F1+'.

-- Transamerica Life & Annuity, 'F1+'.

Fixed-Income Ratings Affirmed, Rating Outlook Stable

-- AEGON USA Inc. -- Senior Debt, 'AA-'.

-- Commonwealth General -- Senior Debt, 'AA-'.

-- Transamerica Corporation -- Senior Debt, 'AA-'.

-- Transamerica Corporation -- Preferred Stock, 'A+'.

Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. Dual-headquartered in New York and London with a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in over 40 local offices worldwide. The agency, which is a combination of Fitch IBCA and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Banks, Corporations, Structured Finance, Insurance, Sovereigns and Public Finance Markets worldwide.