STANDARD & POOR'S: AMP GROUP RATINGS NOT IMPACTED BY BID FOR GIO

MELBOURNE, Australia, Aug. 25 /PRNewswire/ -- Standard & Poor's today
affirmed its ratings on various AMP group companies following AMP Ltd.'s
announcement this morning of an intended takeover bid for general insurance
and financial services group GIO Australia Holdings Ltd. (see list below).  If
successful, the acquisition of GIO on the terms currently proposed would be
unlikely to have a major impact on the financial strength of the AMP group,
while significantly bolstering AMP's existing general insurance business
profile in Australia.  The proposed takeover, which would more than double
AMP's Australian general insurance premium income, is consistent with AMP's
stated goal of becoming a leading financial services provider in Australia.
Today's announcement follows AMP's recent acquisitions of funds management
operations Henderson (in the U.K.) and Southpac (in New Zealand), and
Standard & Poor's expects that acquisition activity will continue to be a
feature of the evolving AMP group for some time. 
AMP's intended offer for GIO is expected to be formalized within the next
month, but the acquisition will take some time to complete, assuming the bid
is successful.  If the acquisition is finalized, AMP would become the
third-largest general insurer in the Australian market behind NRMA and the
merged Commercial Union/NZI group, forming a better complement to the group's
market-leading position in Australian life insurance and funds management.
The acquisition of GIO would provide a fillip for AMP General Insurance Ltd.,
whose operating performance continues to be the lackluster, as the acquisition
should provide AMP General with the scale it requires to achieve operating
efficiencies.  Other key positives, which could emerge for AMP from such a
merger, would include:  the addition of a significant funds management
portfolio (of more than A$10 billion) as represented by GIO's life insurance
and personal financial services businesses; broadened distribution potential;
depth of well-experienced general insurance management personnel; and
excellent existing brand presence through GIO's various regional franchises.
The main challenge in a merger would be for AMP management to efficiently and
most effectively combine and rationalize operations in order to reap the
maximum possible value from the transaction. 
Standard & Poor's expects that AMP would maintain a financial structure
appropriate to existing rating levels following completion of the proposed
transaction.  At this early stage in the proposed bid, it is likely that a
takeover would largely be funded through a scrip swap, rather than the cash
payment alternative, given the apparent market appetite for AMP stock.  While
a successful takeover would result in some level of increase in group gearing
to fund the cash proportion of the bid, Standard & Poor's does not anticipate
that this would result in a gearing level or operating leverage outside of the
existing rating tolerance, Standard & Poor's said. -- CreditWire 


    RATINGS AFFIRMED
    AMP Life Ltd.
    Counterparty credit rating (local currency)       AAA/Stable/-
    Insurer financial strength rating                 AAA
    Pearl Assurance PLC (Long-term Fund))
    Counterparty credit rating (local currency)       AAA/Stable/-
    Insurer financial strength rating                 AAA
    Pearl Assurance PLC (General Insurance Fund))
    Counterparty credit rating  (local currency)      AAA/Stable/-
    Insurer financial strength rating
    AMP (U.K.) PLC
    UK100 unsecured bonds due 2001                    AA
    Sterling commercial paper prog                    A-1+
    AMP Bank Ltd.
    Counterparty credit rating                   AA/Stable/A-1+
    AMP General Insurance Ltd.
    Counterparty credit rating (local currency)       A/Stable/-
    Insurer financial strength rating                 A
    MGICA Ltd.
    Counterparty credit rating (local currency)       AA-/Stable/-
    Insurer financial strength rating                 AA-
    Advantage Lenders Mortgage Insurance Pty. Ltd.
    Counterparty credit rating (local currency)       AA-/Stable/-
    Insurer financial strength rating                 AA-




SOURCE  Standard & Poor's CreditWire /CONTACT:  Natalie Wells, +61-3-9250-4543, or Michael Vine,
+61-3-9250-4542, both of Standard & Poor's/ 
/Company News On-Call:  http://www.prnewswire.com or fax, 800-758-5804,
ext. 121503/ 
/Web site:  http://www.ratings.standardpoor.com/ 
CO:  AMP Ltd.; GIO Australia Holdings Ltd.; Pearl Assurance PLC
ST:  Australia
IN:  FIN
SU:  RTG 
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