New York: Standard & Poor's (S&P) ratings services says it has affirmed its AA+ counterparty credit and financial strength ratings on New York Life Insurance Company (NYL) and its affiliates.

At the same time, S&P assigned its AA- rating to NYL's new issue of 5.875 per cent surplus notes totalling $1 billion dollars due 2033. The outlook is stable.

"These ratings reflect the extraordinary strength of NYL's business position in individual life and annuities, the enhanced productivity of its career agency force, the continued improvement in individual sales, its rapidly growing presence in the international markets, and its developing position in the investment management business," says S&P credit analyst Thomas Upton.

Offsetting these considerations to some extent are the challenges of depressed equity and credit markets with the latter influencing the company through its large fixed-income portfolio, of maintaining and enhancing the operational efficiencies that have been gained in recent years, and of realising the potential of some of its peripheral businesses.

Despite suffering sizeable credit and equity losses in its general account portfolio in 2003, due to the general negative trends in those markets, NYL retains substantial capital redundancies with a risk-based capital position that remains extremely strong.

The new surplus note issue will supplement that strength, and although the proceeds of this issue are designated for general corporate purposes, S&P notes that management has a recent track record of making modest strategic acquisitions designed to augment its international and investment management businesses.

The rating agency expects NYL to maintain extremely strong risk-based capital and very strong liquidity. In addition, its international business will continue to have double-digit growth even as its profitability increases. Moreover, the general account asset portfolio will continue to be of relatively high quality and liquidity will remain very strong.