SANLAM LIFE INSURANCE LIMITED - SLI3/ SLI4 - Credit rating action by Standard & Poor's

SLI3/ SLI4 - Credit rating action by Standard & Poor's

SANLAM LIFE INSURANCE LIMITED
(“Sanlam Life”)
Registration number 1998/021121/06
Bond Code: SLI3
ISIN No: ZAG000107905
Bond Code: SLI4
ISIN No: ZAG000138629

CREDIT RATING ACTION BY STANDARD & POOR’S

Notice is hereby given in terms of the Debt Listings Requirements of the JSE Limited that Standard and Poor’s (S&P)
has on 30 November 2017 downgraded the ratings of a number of South Africa-based Insurers and Reinsurers following
similar action on the South African Sovereign, which was downgraded on 24 November 2017.

On 24 November 2017, S&P lowered its foreign currency sovereign ratings on the Republic of South Africa to ‘BB’ from
‘BB+’ and its local currency sovereign ratings to ‘BB+’ from ‘BBB-’. As a result, Sanlam Life’s South Africa national scale
rating was reduced to ‘zaAA+’ from ‘zaAAA-‘.

Lowering the sovereign ratings to speculative-grade indicates that the asset quality in the country has weakened. Hence,
the sovereign downgrade has directly weakened the credit quality of the investments of those insurers that hold most of
their assets in South Africa. Consequently, their balance sheets are more vulnerable. By extension, the financial strength
of many of the rated insurers has declined.

S&P lowered the South Africa national scale ratings on these entities to 'zaAA+', in line with the national scale rating on
the sovereign. This reflects S&P’s belief that these groups' liability profiles are largely loss absorbing. This would allow
them to withstand the stress associated with a foreign currency sovereign default.

The ratings on these players are limited to the local currency ratings on South Africa because, in S&P’s view, their asset
and liability concentration in the domestic economy makes them susceptible to the financial and macroeconomic
stresses associated with a local currency sovereign default.

S&P lowered its ratings on the deferrable debt issued by Sanlam Life Insurance Ltd to reflect the downgrade of the
issuers and taking into account:

    -   One notch down from the global scale rating for deferability; and
    -   Two notches down from the national scale rating for subordination because S&P limits the issuer's global scale
        ratings to the 'BB+' local currency ratings on South Africa (for investment-grade issuers, S&P takes only one
        notch, but South Africa is now rated as speculative grade).

Further details regarding the rating action is available on S&P’s website (www.standardandpoors.com/ratingsdirect) or in
its press release entitled “Various Rating Actions Taken on South Africa-Based Insurers and Reinsurers Following
Sovereign Downgrade”.

Cape Town
07 December 2017

Debt Sponsor
Absa Bank Limited (acting through its Corporate and Investment Bank division)

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