Fitch Assigns 'A' to Great-West U.S. Deferrable Debentures

Business Wire, Nov 10, 2004

CHICAGO -- Today, Fitch Ratings assigned an 'A' rating to Great-West Life & Annuity Insurance Capital, LP's (Great-West LP) new issuance of $175 million U.S. deferred debentures to qualified institutional investors in reliance on Rule 144A under the Securities Act of 1933. Great-West LP is a limited partnership, wholly-owned by Great-West Lifeco (TSE: GWO). In addition, Fitch affirmed Great-West Lifeco's 'A ' long-term issuer rating, GWL&A Financial, Inc.'s 'A ' long-term issuer rating and the ratings on all the companies' outstanding debt. GWL&A Financial, Inc. is GWO's U.S. holding company and the guarantor of Great-West LP's deferred debentures on a junior subordinated basis. The Rating Outlook is Stable. See below for a complete listing of all ratings.

The net proceeds of Great-West LP's debentures will be used to purchase a surplus note from operating subsidiary, Great-West Life and Annuity Insurance Company. Thereafter, GWL&A Financial, Inc. will proceed with the redemption of the existing $175 million in Great-West Life & Annuity Insurance Capital 1 subordinated capital income securities.

Fitch views GWO's geographic operations as contributing to, and benefiting from, the financial strength and diversity of the combined organization and therefore rates the operations on a group basis. GWO's pro forma equity adjusted leverage was 13.7% at Sept. 30, 2004 compared to 17.3% at year-end 2003 (16.9% and 21.6% respectively, when adjusting equity for 50% of goodwill) and was within ratings expectations. Through the first nine months of 2004, GWO has paid down C$450 million in bank loans used in funding its 2003 acquisition of Canada Life Financial Corporation. GWO intends to continue to reduce total financial leverage to within the company's run-rate maximum of 25%, from pro forma 30.6% at Sept. 30, 2004. While fixed-charge coverage dropped to 8.7 times (x) in 2003 and 8.5x through the first nine months of 2004, from 10.1x in 2002, Fitch expects GWO's coverage to remain above ratings expectations of 7.0x.

GWO is a Canadian financial services holding company with interests in life insurance, health insurance, retirement savings and reinsurance. GWO's primary operations are in Canada, the United States and Europe. GWO reported shareholders net income of C$1,234 million through the first nine months of 2004.

Entity/Issue/Type             Action        Rating/Outlook

GWL&A Financial Corp.

--Long-term issuer Affirmed 'A '/Stable.

Great-West Life & Annuity Insurance Capital 1

--7.25% capital income securities Affirmed 'A'/Stable.

Great-West Life & Annuity Insurance LP

--6.625% deferrable debentures Assigned 'A'/Stable.

Great-West Lifeco, Inc.

--Long-term issuer Affirmed 'A '/Stable;

--6.75% senior debentures due 2015 Affirmed at 'A '/Stable;

--6.14% senior debentures due 2018 Affirmed at 'A '/Stable;

--6.74% senior debentures due 2031 Affirmed at 'A '/Stable;

--6.67% senior debentures due 2033 Affirmed at 'A /Stable;

--Series D, 4.70% noncumulative first preferred shares Affirmed
 'A'/Stable;

--Series E, 4.8% noncumulative first preferred shares Affirmed
 'A'/Stable;

--Series F, 5.9% noncumulative first preferred shares Affirmed
 'A'/Stable;

--Series G, 5.20% noncumulative first preferred shares Affirmed at
 'A'/Stable.

Related Ratings:

Great-West Life Assurance Company

--Insurer financial strength 'AA '/Stable;

--Long-term issuer 'AA'/Stable;

--Series L, 5.20% noncumulative preferred shares 'AA-'/Stable;

--Series O, 5.55% noncumulative preferred shares 'AA-'/Stable.

Great-West Life Capital Trust

--Capital Trust Securities (GREATs series A) 'AA-'/Stable.

Canada Life Financial Corporation

--Series B, 6.25% noncumulative preferred shares 'A'/Stable.

London Life Insurance Company

--Insurer financial strength 'AA '/Stable;

--Short-term issuer 'F1 ';

--Commercial paper 'F1 '.

Great-West Life and Annuity Insurance Company

--Insurer financial strength 'AA '/Stable;

--Short-term issuer 'F1 ';

--Commercial paper 'F1 '.

Canada Life Assurance Company

--Insurer financial strength 'AA '/Stable;

--Long-term issuer 'AA'/Stable;

--8% Subordinated debentures due 2011 'AA-'/Stable;

--Series 1, 5.8% subordinated debentures due 2013 'AA-'/Stable;

--Series 2, 6.4% subordinated debentures due 2028 'AA-'/Stable.

Canada Life Capital Trust

--Series A, 6.679% Capital Trust Securities (CLiCS) 'AA-'/Stable;

--Series B, 7.529% Capital Trust Securities (CLiCS) 'AA-'/Stable.

First Great-West Life & Annuity Company

--Insurer financial strength 'AA '/Stable.

Canada Life Insurance Company of America

--Insurer financial strength 'AA '/Stable.

Canada Life Insurance Company of New York

--Insurer financial strength 'AA '/Stable.