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DELPHI FINANCIAL GROUP PROPOSED $85 MILLION SENIOR NOTES RATED 'BB+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 17 /PRNewswire/ -- Delphi Financial Group, Inc.'s $85 million proposed senior notes due 2003 are rated "BB+" by Fitch and placed on FitchAlert with positive implications.
 The notes are expected to refinance part of the company's existing senior subordinated debt and are a significant component in the company's overall recapitalization plan. The plan also includes a simultaneous public stock offering. Upon successful completion of both offerings, Fitch anticipates raising the rating to "BBB-."
 Delphi Financial Group is an insurance holding company whose primary operating subsidiary is Reliance Standard Life Insurance Co. (RSLIC), a successful niche writer of group life and disability insurance for medium-size employers. The company also writes annuities and a modest volume of individual business. RSLIC is one of the 10 leading insurers of disability products in the nation.
 The rating reflects the company's strong business fundamentals and expected dividend capability based on historical and projected earnings performance, made stronger by the reduced debt servicing requirements accompanying the subordinated debt refinance. The company's niche market is more relationship and service driven than price sensitive. Despite growth, operating expenses have been controlled to modest levels. Both these factors contribute to the company's favorable profit margins. These positive attributes are mitigated by Delphi's leveraged balance sheet, dependence on RSLIC's earnings power for debt service, and investment concentration in mortgage-backed securities.
 Delphi's asset growth has increased at a 20 percent compound rate since RSLIC was acquired in 1987. Total assets were $2.5 billion at June 30, 1993. Asset quality is good, with 97 percent of the fixed maturity portfolio invested in high quality securities. Somewhat unusual is that 70 percent of invested assets consist of a diversified portfolio of mortgage-backed securities, more than a third of which are U.S. government agency issues. Additionally, 11 percent of invested assets are managed by independent managers.
 Delphi's financial leverage has consistently improved, with debt to total capitalization at 52 percent at June 30, 1993, compared to 88 percent at year-end 1988. Much of the capitalization improvement is due to strong earnings performance. In recent years, investment gains have also been realized, particularly as mortgage-backed investments were shifted to the more predictable PAC and TAC varieties from other asset classes. Interest coverage on a trailing 12-month basis was 4.0 times at June 30, 1993, which also represents improvement from previous periods.
 -0- 9/17/93
 /CONTACT: Laurance M. Ring, 212-908-0673, or Lygia X. Campbell, 212-908-0695, both of Fitch/


CO: Delphi Financial Group, Inc. ST: IN: INS SU: RTG

TW -- NY019 -- 3055 09/17/93 11:36 EDT
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Publication:PR Newswire
Date:Sep 17, 1993
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