Best’s News & Research Service - April 21, 2022 10:43 AM (EDT)
AM Best Affirms Credit Ratings of Athene Holding Ltd. and Its Subsidiaries; Assigns Credit Ratings to Athene Annuity Re Ltd.
- April 21, 2022 10:43 AM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a+” (Excellent) of the members of Athene Group (Athene). Athene, which is focused on the pension group annuity, funding agreement, fixed indexed and fixed annuity market segments, is the consolidation of the organization’s U.S. operating companies, along with its affiliated reinsurance companies domiciled in Bermuda. Additionally, AM Best has affirmed the Long-Term ICR of “bbb+” (Good), the existing Long-Term Issue Credit Ratings (Long-Term IRs) and the indicative Long-Term IRs of Athene Holding Ltd. (Bermuda). Athene Holding Ltd. operates as the holding company for the U.S. and Bermuda operations. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings.)
Concurrently, AM Best has assigned an FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) to Athene Annuity Re Ltd. (Bermuda). The outlook assigned to this rating is stable.
The ratings reflect Athene’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.
AM Best views Athene’s consolidated risk-adjusted capitalization as strongest, as measured by Best’s Capital Adequacy Ratio (BCAR), and supported by favorable financial flexibility. Athene has demonstrated its ability to access capital markets and maintains additional access to capital and liquidity through a revolving credit facility, Federal Home Loan Bank borrowing capacity, and a shelf registration statement, as well as uncalled capital commitments from Athene Co-Invest Reinsurance Affiliates (ACRA) investors. The completed merger with Apollo Global Management, Inc. is expected to increase Athene’s financial flexibility.
Financial leverage metrics have improved in the past year as capital growth has outstripped debt issuances. However, AM Best notes that Athene holds elevated allocations to more complex and less-liquid investments, which could be impacted materially under adverse market conditions.
Athene has a track record of strong earnings driven by favorable earning spreads and operating profitability, despite the challenges related to the persistent low interest rate environment and high competitive pressures.
Athene’s favorable business profile reflects continued enhancements through additional distribution channels in its retail markets, and expansion of its pension risk transfer business in the United States and United Kingdom, its increased issuances of funding agreements and of its flow reinsurance channel in Japan in recent years. Furthermore, ACRA and the recent fixed annuity reinsurance agreement with Jackson National Life Insurance Company have been accretive to earnings.
The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with stable outlooks for the following members of Athene Group:
- Athene Annuity & Life Assurance Company
- Athene Annuity & Life Assurance Company of New York
- Athene Annuity and Life Company
- Athene Life Insurance Company of New York
- Athene Life Re Ltd.
- Athene Life Re International Ltd.
- Athene Co-Invest Reinsurance Affiliate International Ltd.
- Athene Co-Invest Reinsurance Affiliate 1A Ltd.
- Athene Co-Invest Reinsurance Affiliate 1B Ltd.
The following Long-Term IRs have been affirmed with stable outlooks:
Athene Holding Ltd. —
— “bbb+” (Good) on $500 million 3.45% senior unsecured notes, due 2052
— “bbb+” (Good) on $500 million 3.95% senior unsecured notes, due 2051
— “bbb+” (Good) on $1.0 billion 4.125% senior unsecured notes, due 2028
— “bbb+” (Good) on $500 million 6.15% senior unsecured notes, due 2030
— “bbb+” (Good) on $500 million 3.5% senior unsecured notes, due 2031
— “bbb-” (Good) on $750 million 6.35%, perpetual, non-cumulative preferred stock, Series A
— “bbb-” (Good) on $300 million 5.625%, perpetual, non-cumulative preferred stock, Series B
— “bbb-” (Good) on $600 million 6.375%, preferred stock
— “bbb-” (Good) on $575 million 4.875%, preferred stock
The following indicative Long-Term IRs have been affirmed with stable outlooks:
Athene Holding Ltd. —
— “bbb+” (Good) on senior unsecured debt
— “bbb” (Good) on subordinated debt
— “bbb-” (Good) on junior subordinated debt
— “bbb-” (Good) 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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.