AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “bbb”, the existing Long-Term Issue Credit Ratings (Long-Term IRs) and the indicative Long-Term IRs of Athene Holding Ltd. (Athene) (NYSE:ATH) (Bermuda). Concurrently, AM Best has upgraded the Long-Term ICRs to “a+” from “a” and affirmed the Financial Strength Rating (FSR) of A (Excellent) of its insurance subsidiaries. The outlook of the Long-Term ICRs has been revised to stable from positive, while the outlook of the FSR is stable.
The Credit Ratings (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 and Federal Home Loan Bank borrowing capacity, as well as uncalled capital commitments from Athene Co-Invest Reinsurance Affiliates (ACRA) investors. Financial leverage metrics have increased with recent senior unsecured notes and preferred equity issuances, but still 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 adverse market conditions.
Athene has a trend of strong earnings driven by sustained 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, 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 are projected to be accretive to earnings.
The Long-Term ICRs have been upgraded to “a+” from “a” and the FSR of A (Excellent) has been affirmed with stable outlooks for the following members of Athene:
- 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 upgraded with stable outlooks:
Athene Holding Ltd. —
-- to “bbb+” from “bbb” on $1.0 billion 4.125% senior unsecured notes, due 2028
-- to “bbb+” from “bbb” on $500 million 6.150% senior unsecured notes, due 2030
-- to “bbb+” from “bbb” on $500 million 3.50% senior unsecured notes, due 2031
-- to “bbb-” from “bb+” on $750 million, 6.35%, perpetual, non-cumulative preferred stock, Series A
-- to “bbb-” from “bb+” on $300 million, 5.625%, perpetual, non-cumulative preferred stock, Series B
-- to “bbb-” from “bb+” on $600 million, 6.375%, perpetual, non-cumulative preferred stock, Series C
-- to “bbb-” from “bb+” on $575 million, 4.875%, perpetual, non-cumulative preferred stock, Series D
The following indicative Long-Term IRs have been upgraded with stable outlooks:
Athene Holding Ltd. —
-- to “bbb+” from “bbb” on senior unsecured debt
-- to “bbb” from “bbb-” on subordinated debt
-- to “bbb-” from “bb+” on junior subordinated debt
-- to “bbb-” from “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.
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Senior Financial Analyst
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