Fitch: MassMutual Ratings Unaffected by Acquisition

CHICAGO--(BUSINESS WIRE)--Fitch Ratings views yesterday's announcement of Massachusetts Mutual Life Insurance Company's (MassMutual) $400 million acquisition of the Hartford Financial Services Group Inc.'s (Hartford) retirement plans business as neutral to MassMutual's ratings. Fitch's view is shaped by the acquisition's small size and anticipated operating contribution compared to the company as a whole. Acquisition closing is expected to occur in the fourth quarter 2012. A full list of the current ratings follows at the end of this release.

Fitch believes the transaction is in-line with MassMutual's strategic goal of growing its presence in the retirement plans market. The independent distribution model and smaller case size of the Hartford business also provides a complement to MassMutual's current distribution methods and focus on small to mid-sized plans.

The $54.9 billion in assets under management (AUM) acquired from the Hartford business is significant compared to MassMutual's existing retirement plans AUM of $66.2 billion, both as of June 30, 2012. Fitch expects that MassMutual will fund the purchase price from existing capital. The acquisition price is small, roughly 2.8% of MassMutual's $14 billion in Total Adjusted Capital (TAC) as of June 30, 2012.

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company and its affiliates. MassMutual is headquartered in Springfield, MA. Its affiliates include OppenheimerFunds, Inc.; Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; MML Investors Services, LLC., MassMutual International LLC and The MassMutual Trust Company, FSB. The company had $470 billion in assets under management as of June 30, 2012.

Key rating triggers for MassMutual's ratings that could lead to an upgrade include:

--Sustained improvement in quality and stability of operating results, investment performance and capital generation.

Key rating triggers for MassMutual ratings that could lead to a downgrade include:

--Increased volatility in capital and earnings due to higher than expected credit-related losses (particularly in commercial real-estate related investments), adverse outcome to litigation or other unexpected developments.

--NAIC risk-based capital ratio below 400%.

--Surplus notes to TAC ratio above 15%.

--A change in MassMutual's legal organizational structure (which Fitch considers unlikely) or a significant change in the macro environment.

Fitch affirmed the following ratings with a Stable Outlook on March 14, 2012:

Massachusetts Mutual Life Insurance Company

--Insurer Financial Strength (IFS) at 'AA+';

--Issuer Default Rating (IDR) at 'AA';

--$250 million 7.625% surplus notes due Nov. 15, 2023 at 'AA-';

--$100 million 7.5% surplus notes due March 1, 2024 at 'AA-';

--$250 million 5.625% surplus notes due May 15, 2033 at 'AA-';

--$750 million 8.875% surplus notes due June 1, 2039 at 'AA-';

--$400 million 5.375% surplus notes due Dec. 1, 2041 at 'AA-';

--Short-term IDR at 'F1+';

--Commercial paper program at 'F1+'.

C.M. Life Insurance Company

MML Bay State Life Insurance Company

--IFS at 'AA+'.

MassMutual Global Funding, LLC

MassMutual Global Funding II

--Secured notes program at 'AA+'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology' (Sept. 22, 2011).

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=651018

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