Phoenix Group Holdings Regulatory News (PHNX)

Phoenix Group Holdings announces credit rating upgrades by Fitch Ratings

Phoenix Group Holdings ("Phoenix" and, together with its subsidiaries, the "Group") is pleased to announce that the Insurer Financial Strength ("IFS") ratings of two of its principal operating life companies, Phoenix Life Limited and Phoenix Life Assurance Limited, have been upgraded to "A+" (strong) with a stable outlook by Fitch Ratings.

These upgrades reflect Fitch's view of Phoenix's very strong capitalisation and improved leverage, as well as the progress in integrating the AXA Wealth and Abbey Life acquisitions. The rating upgrades also result in a 25bps reduction in the interest margin of the Group's Revolving Credit Facility ('RCF') to 110bps(2), effective from 28 July 2017.

The ratings actions are as follows:

The credit rating upgrades from Fitch Ratings are a positive outcome for the Group and will enhance Phoenix's position in the debt capital markets.

Enquiries

Investors/analysts:Sam Perowne, Head of Investor Relations, Phoenix Group+44 (0)20 3735 0021

Debt investors:

Rashmin Shah, Group Treasurer, Phoenix Group

+44 (0) 20 3735 0059

Media:

Sundeep Tucker, Maitland+ 44 (0) 20 7379 5151

Shellie Wells, Head of Corporate Communications, Phoenix Group+44 (0)20 3735 0922

Notes

1. Phoenix Group is the UK's largest specialist consolidator of closed life funds with c.6.1 million customers and £76 billion of life company assets as at 31 December 2016.

2. The current drawn amount on the RCF is £166 million. Following the upgrade, the RCF will have an interest margin of 110bps. In addition, a utilisation fee of 10bps is payable if the RCF is utilised by up to 33% of the £900m facility, 20bps is payable if the RCF is utilised by between 33% and 67% of the £900 million facility, and 40bps if utilised by more than 67% of the £900 million facility. Commitment fees of 35% of margin are payable on undrawn amounts.

3. Originally £300m.

4. This announcement in relation to Phoenix Group Holdings and its subsidiaries (the 'Group') contains, and we may make other statements (verbal or otherwise) containing, forward-looking statements and other financial and/or statistical data about the Group's current plans, goals and expectations relating to future financial conditions, performance, results, strategy and/or objectives.

Statements containing the words: 'believes', 'intends', 'will', 'may', 'should', 'expects', 'plans', 'aims', 'seeks', 'targets', 'continues' and 'anticipates' or other words of similar meaning are forward-looking. Such forward-looking statements and other financial and/or statistical data involve risk and uncertainty because they relate to future events and circumstances that are beyond the Group's control. For example, certain insurance risk disclosures are dependent on the Group's choices about assumptions and models, which by their nature are estimates. As such, actual future gains and losses could differ materially from those that the Group has estimated.

Other factors which could cause actual results to differ materially from those estimated by forward-looking statements include but are not limited to: domestic and global economic and business conditions; asset prices; market related risks such as fluctuations in interest rates and exchange rates, the potential for a sustained low-interest rate environment, and the performance of financial markets generally; the policies and actions of governmental and/or regulatory authorities, including, for example, new government initiatives related to the financial crisis and the effect of the European Union's "Solvency II" requirements on the Group's capital maintenance requirements; the impact of inflation and deflation; the political, legal and economic effects of the UK's vote to leave the European Union; market competition; changes in assumptions in pricing and reserving for insurance business (particularly with regard to mortality and morbidity trends, gender pricing and lapse rates); the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; risks associated with arrangements with third parties; inability of reinsurers to meet obligations or unavailability of reinsurance coverage; the impact of changes in capital, solvency or accounting standards, and tax and other legislation and regulations in the jurisdictions in which members of the Group operate.

As a result, the Group's actual future financial condition, performance and results may differ materially from the plans, goals and expectations set out in the forward-looking statements and other financial and/or statistical data within this announcement. The Group undertakes no obligation to update any of the forward-looking statements or data contained within this announcement or any other forward-looking statements or data it may make or publish. Nothing in this announcement should be construed as a profit forecast or estimate.