MAY 22, 2020 10:09 AM (EDT)
AM Best Affirms Credit Ratings of Athene Holding Ltd. and Its Subsidiaries
FOR IMMEDIATE RELEASE
OLDWICK - MAY 22, 2020 10:09 AM (EDT)
The ratings reflect Athene’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
The positive outlook of the Long-Term ICR reflects continued enhancements to Athene’s business profile through additional distribution channels in its retail markets, and expansion of its pension risk transfer business in the United States and United Kingdom in recent years. Furthermore, the establishment of the Athene Co-Invest Reinsurance Affiliates (ACRA) provides on-demand access to third-party capital to support new business growth and is expected to be accretive to earnings through management fees.
AM Best views Athene’s risk-adjusted capitalization as very strong and supported by favorable financial flexibility. The company has demonstrated its ability to access capital markets and maintains additional access to capital and liquidity through a revolving credit facility and Federal Home Loan Bank borrowing capacity, as well as uncalled capital commitments from ACRA investors. Financial leverage metrics have increased with recent senior unsecured notes and preferred equity issuances in recent periods, but remain within guidelines for the current ratings. However, AM Best notes that Athene holds elevated allocations to more complex and less-liquid investments, which could be impacted materially under the current stressed market conditions.
The expansion of Athene’s business profile has led to consistently strong growth in sales across the company’s retail fixed indexed annuities and pension risk transfer markets. AM Best notes the transactional nature of the company’s block reinsurance business creates notable volatility in annual deposits; however, the execution of several flow reinsurance transactions in recent years is expected to support incremental growth going forward. The company also has sustained favorable earning spreads and operating profitability, despite the challenges related to the persistent low interest rate environment and high competitive pressures.
The FSR of A (Excellent) has been affirmed with a stable outlook, and the Long-Term ICRs of “a” have been affirmed with positive outlooks for the following members of Athene Group:
The following Long-Term IRs have been affirmed with positive outlooks:
Athene Holding Ltd. —
—“bbb” on $1.0 billion 4.125% senior unsecured notes, due 2028
—“bbb” on $500 million 6.150% senior unsecured notes due 2030
—“bb+” on $750 million, 6.35%, perpetual, non-cumulative preferred stock, Series A
—“bb+” on $300 million, 5.625%, perpetual, non-cumulative preferred stock, Series B
The following indicative Long-Term IRs have been affirmed with positive outlooks:
Athene Holding Ltd. —
— “bbb” on senior unsecured debt
— “bbb-” on subordinated debt
— “bb+” on junior subordinated debt
— “bb+” on preferred stock
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.