Funding and Rating

Funding

Sampo Group's funding consists both of subordinated and senior debt instruments.

Sampo plc's subsidiaries carrying out P&C and/or Life insurance business use subordinated debt as part of their Solvency Capital in accordance with internal capitalization targets and in compliance with regulatory rules. Maturities and other terms of such liabilities are largely determined by regulatory rules and by Rating Agencies' criteria. P&C and Life insurance companies do not use senior debt as a source of funding.

At the Group's parent company, Sampo Plc, the primary motive for debt is the funding of operations, and not capitalization. Potential strategic arrangements are the major reason for long term funding needs. Short term funding is mainly dependent on the fluctuations in net cash flows.

The decisions regarding the maturity and seniority of long-term funding are based mainly on the estimates regarding the Group's short term profit outlook and solvency position. The issuing of domestic commercial papers (CP) is the primary source of Sampo plc's short-term funding. Sampo issues CPs in maturities preferred by investors with the aim of maintaining the outstanding amount of issuance in a manner that is as stable as possible. To secure its liquidity position, Sampo plc has a binding Revolving Credit Facility with a syndicate of four banks.

Ratings

The following Group companies are rated by international rating agencies:

Further information on rating definitions etc can be found on the homepages of rating agencies:

• Moody's
• Standard and Poor's