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AM Best Affirms Credit Ratings of Massachusetts Mutual Life Insurance Company and Its Subsidiaries

AM Best has affirmed the Financial Strength Rating of A++ (Superior) and the Long-Term Issuer Credit Ratings of "aa+" of Massachusetts Mutual Life Insurance Company (MassMutual) and its life/health subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company (both domiciled in Enfield, CT). Concurrently, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IR) of "aa-" on the existing surplus notes of MassMutual and "aa+" on notes issued under the funding agreement-backed securities programs of MassMutual Global Funding, LLC and MassMutual Global Funding II. The outlook of these Credit Ratings (rating) is stable. The aforementioned companies are headquartered in Springfield, MA. (See below for a detailed listing of the Long-Term IRs and Short-Term Issue Credit Rating [Short-Term IR].)

The ratings reflect MassMutual’s balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, very favorable business profile and very strong enterprise risk management (ERM).

MassMutual is one of the largest and most recognizable brands in the United States life insurance market, with diverse product offerings, such as life insurance, annuities, disability and bank-owned life insurance, as well as pensions and institutional asset management. MassMutual is also recognized as a market leader in ordinary life insurance sales, particularly whole life. In recent years, MassMutual’s organizational structure and business profile has become more U.S.-focused with the sale of its majority interests in certain Asian subsidiaries and OppenheimerFunds, Inc. to Invesco. However, MassMutual retained a sizeable economic interest through its ownership of preferred and common stock in Invesco. MassMutual continues to serve the institutional asset market through Barings, which is a wholly owned asset management affiliate.

MassMutual’s risk-adjusted capitalization is assessed at the strongest level. Investment risk is higher when compared with industry benchmarks, but the company has been proactive in reducing its risk exposure over the last few years. AM Best views the invested asset portfolio as well-diversified and of good overall credit quality with robust stress testing and good asset-liability management. Financial flexibility is very strong, and MassMutual maintains a significant ability to access the capital markets given its moderate levels of financial leverage and strong interest coverage ratios, even when incorporating unconsolidated non-recourse debt held at an affiliate entity. Operating leverage remains within AM Best’s expectations, and MassMutual has very strong liquidity that should buffer its balance sheet in the current COVID-19-driven economic environment.

Operating performance historically has been strong, although MassMutual may face challenges in the current economic environment given the potential for a resurgence in equity market volatility, asset impairments, ongoing low interest rates and top-line revenue pressure. The overall impact to earnings from the current economic environment is expected to be manageable. MassMutual’s ERM is assessed at the very strong level, which reflects its economic capital, stress modeling and detailed ERM mitigation policies and procedures.

The following Short-Term IR has been affirmed:

Massachusetts Mutual Life Insurance Company—
-- AMB-1+ on commercial paper program

The following Long-Term IRs have been affirmed with a stable outlook:

Massachusetts Mutual Life Insurance Company—
-- "aa-" on $250 million 7.625% surplus notes, due 2023
-- "aa-" on $100 million 7.500% surplus notes, due 2024
-- "aa-" on $250 million 5.625% surplus notes, due 2033 (of which $193 million remains outstanding)
-- "aa-" on $750 million 8.875% surplus notes, due 2039 (of which $310 million remains outstanding)
-- "aa-" on $400 million 5.375% surplus notes, due 2041 (of which $263 million remains outstanding)
-- "aa-" on $500 million 4.5% surplus notes, due 2065 (of which $258 million remains outstanding)
-- "aa-" on $475 million 4.9% surplus notes, due 2077
-- "aa-" on $838.5 million 3.729% surplus notes, due 2070
-- "aa-" on $700 million 3.375% surplus notes, due 2050

MassMutual Global Funding, LLC—"aa+" program rating

MassMutual Global Funding II—"aa+" program rating
-- "aa+" on all outstanding notes issued under the program

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Contacts

Frank Walko, FLMI, CPA
Financial Analyst
+1 908 439 2200, ext. 5072
frank.walko@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Rosemarie Mirabella
Director
+1 908 439 2200, ext. 5892
rosemarie.mirabella@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com