Fitch Affirms MONY's Rtgs; Changes Rtg Outlook To Negative.

Business Editors

CHICAGO--(BUSINESS WIRE)--Nov. 9, 2001

Fitch affirmed all ratings of The MONY Group Inc. (MONY), and changed the Rating Outlook to Negative from Stable.

The rating action follows Fitch's annual review of MONY and discussion with management regarding

The affirmation of MONY's ratings reflect the core positives of the company, specifically, a successful career agency force, development of varied sources of distribution, strong brand name recognition, improvement in the asset risk profile, and diversification of the company's product offerings.

Balanced against these strengths, and the reason for the change in Rating Outlook is Fitch's concern regarding the company's ongoing core profitability. MONY's chosen markets are typified by heavy competition, lower margins, and correlation to the U.S. economy. This decline in 2001 profitability has been greater than Fitch anticipated in a down economic environment. It is also important to note that a large percentage of the MONY's profits have been funded by the disposed group pension operation, which is scheduled to stop providing earnings after 2002, and limited partnership income, which is not considered a core operation.

MONY's management also announced a major restructuring of their operations and an associated charge for restructuring and asset write down to be taken in the fourth quarter. The roughly $100 million after tax charge is evenly split between the costs associated with restructuring into three major profit centers, manufacturing, distribution, and investment management, and write downs on certain assets classes more adversely impacted by the economic environment primarily bonds and venture capital. The restructuring is expected to yield annual cost savings of $35 million, while the asset write downs reflect the difficult economic circumstances faced by investors during 2001.

Today, MONY's management announced plans for 2002, which included GAAP pretax income of $85 million, excluding venture capital income and the final payment from the group pension transaction. Significant to this plan the profitability of the Retail Brokerage segment. This segment includes the recently acquired Advest and Matrix organizations, as well as MONY Securities, and it lost $13 million in the first nine months of 2001. A difficult economic environment, worsened by the events of Sept. 11, and restructuring charges all combined in this loss for the Retail Brokerage segment. A major consideration for Fitch's Rating Outlook during the company's next review cycle will be MONY's delivering on its operating projections.

At Sept. 30, 2001, MONY's long-term debt-to-total capital ratio was 22%, which is within Fitch's expectations of 25%. Fitch also expects, based on MONY's forecast, a fixed charge coverage of 4.3 times for 2002, including venture capital income, group pension earnings, and the final payment from the group pension transaction.

    Entity/Issue/Type              Action        Rating/Outlook
    The MONY Group Inc.
    -- Long-term issuer rating     Affirm        `A-'/Negative;
    -- Short-term issuer rating    Affirm        `F2'/Negative;
    -- Senior debt                 Affirm        `A-'/Negative;
    -- Commercial paper            Affirm        `F2'/Negative.

    MONY Life Insurance Company
    -- Insurer financial strength  Affirm        `AA-'/Negative;
    -- Surplus notes               Affirm        `A'/Negative.

    MONY Life Insurance Company of America
    -- Insurer financial strength  Affirm        `AA-'/Negative.