TIAA Completes Surplus Notes Offering

The Teachers Insurance and Annuity Association of America (TIAA) announced that it has issued $2 billion of surplus notes to further reinforce its strong capital position. The surplus notes, which will bear an annual interest rate of 6.85% and mature in December 2039, will be subordinated to policyholder obligations, beneficiary claims and claims of other classes of creditors of TIAA, as specified under New York law.

"We expect that the issuance of surplus notes will help to further reinforce TIAA's strong capital position," said Georganne C. Proctor, TIAA's Executive Vice President and Chief Financial Officer. "We believe this was an opportune time in the markets to issue these notes, which enable us to build capital on terms consistent with meeting clients' long-term financial needs."

TIAA's adjusted capital position (encompassing capital, contingency and asset valuation reserves) stands at $18.1 billion as of September 30, 2009. Earlier this year, Moody's, Standard & Poor's (S&P) and Fitch Ratings all affirmed TIAA's highest possible insurance financial strength ratings.1 The rating agencies also revised TIAA's outlook from stable to negative, consistent with the overall insurance industry outlook.

TIAA's surplus notes received a rating of AA from Fitch Ratings and S&P while Moody's gave the notes its equivalent Aa2 rating. Ratings of specific issuances are distinct from the issuer's overall insurance financial strength rating. It is common that debt issuances receive a lower rating than the issuer's financial strength rating and should not be viewed as reflecting negatively on the insurance financial strength and stability of the issuer.

Issuing surplus notes is a common means for life insurance companies to raise external capital and to strengthen their capital base. Interest and principal payments on the surplus notes will be subject to prior approval by the superintendent of the New York State Insurance Department. These notes were issued to qualified institutional buyers, certain non-U.S. investors, and other institutional accredited investors in a transaction exempt from registration under the federal securities laws. College Retirement Equities Fund (CREF), TIAA's companion organization, is not an issuer, guarantor or obligor of these notes. 1Aaa by Moody's (as of 10/09); AAA by Fitch Ratings (as of 6/09); AAA by Standard & Poor's (as of 6/09); and A++ by A.M. Best Company (as of 9/08). Ratings are subject to change. There is no guarantee that current ratings will be maintained. These ratings do not apply to any other product or service not fully backed by TIAA's claims-paying ability. About TIAA-CREF TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $402 billion in combined assets under management (as of 9/30/09) and is the leading provider of retirement services in the academic, research, medical and cultural fields.

TIAA-CREF Individual & Institutional Services, LLC, and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products. Annuity products are issued by TIAA (Teachers Insurance and Annuity Association), New York, NY.

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