AM Best Revises Outlooks to Positive for Athene Holding Ltd. and Its Subsidiaries
May 25, 2023 by AM Best
OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has revised the outlooks to positive from stable and 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 is the consolidation of the organization’s U.S. operating companies, along with its affiliated reinsurance companies domiciled in Bermuda. Additionally, AM Best has revised the outlooks to positive from stable and affirmed the Long-Term ICR of “bbb+” (Good), the 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. (See below for a detailed listing of the companies and Credit Ratings [ratings].)
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.
The positive outlooks reflect a continuing trend of Athene’s improving balance sheet strength. 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 2022 merger with Apollo Global Management, Inc. is expected to have a longer-term positive impact on Athene’s financial flexibility. Financial leverage metrics were slightly higher than last year. AM Best notes that Athene holds elevated allocations to more complex and less-liquid investments, which could be impacted materially under adverse market conditions, though default in its investment portfolio has been low to date.
Athene has a track record of consistently positive earnings driven by favorable earning spreads and operating profitability, despite the challenges related to 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 (PRT) 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. The company has decreased the portion of liabilities with living benefits over the past several years. Furthermore, the ACRA structures, and the recent PRT deals are expected to be accretive to earnings and available capital.
The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with revised outlooks to positive from stable 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.
- Athene Annuity Re Ltd.
The following Long-Term IRs have been affirmed with revised outlooks to positive from stable:
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 revised outlooks to positive from stable:
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.
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