S&P Raises Mutual Life Insurance Co. of N.Y. & Unit.

NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 7/7/98--Standard & Poor's today raised its financial strength and counterparty credit ratings on the Mutual Life Insurance Co. of New York (MONY) and its wholly owned subsidiary, MONY Life Insurance Company of America (MLOA), to single-'A'-plus from single-'A'.

In addition, Standard & Poor's also raised its surplus note rating on MONY to single-'A'-minus from triple-'B'. Standard & Poor's also affirmed its 'A-1'-plus commercial paper rating on MONY. The upgrade is based on continued improvement in capitalization, and earnings while the inherent strength of the companies business profile has been maintained. The rating action also reflects the significant reduction of the company's real estate risk exposure and the positive potential benefits, which are expected to accrue from the completion of its demutualization plan later this year.

Major rating factors include:

-- MONY and MLOA have achieved an excellent business profile as a result of their success in cultivating high quality relationships with agents who sell successfully to the upscale market. MONY has distinguished itself by having 22% of its 2,092 agents achieve Million Dollar Round Table status, which ranks it among the highest in the industry;

-- Capitalization, which as of Dec. 31, 1997 at a level of 233.6%, was considered superior and supportive of the higher rating. Total adjusted capital improved by $153.3 million in 1997;

-- MONY's significant statutory earnings improvement in 1997 to $96.5 million from $84.0 million in 1996 on an aftertax basis before realized gains was the result of improved persistency and mortality, as well as from gains in both variable products and Enterprise mutual fund sales. At this higher level, earnings are considered to be consistent with the rating;

-- MONY's success in reducing its real estate exposure from $2.3 billion at the end of 1994 to less than $1.3 billion at the end of the first quarter of 1998. Nevertheless, the company's remaining exposure in this asset category remains high relative to the rating; and

-- Liquidity, while markedly improved through the sale of the group pension operations to Aegon and continued reduction in equity real estate, is estimated at 203% as of the end of 1997.

OUTLOOK: STABLE

The outlook is based on the following expectations:

-- Standard & Poor's expects statutory earnings before net realized capital gains will continue to improve and are likely to exceed $100 million in 1998;

-- Real estate sales of $600 million in 1998, reducing total equity real estate exposure to less than $800 million;

Capital adequacy ratio in excess of 250% from internal operations, not reflecting the potential benefits of demutualization; and

-- Successful completion of demutualization. -- CreditWire

   CONTACT:  Timothy W Clark, New York 212/208-1593
              Neil T Strauss, New York 212/208-8344
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