AM Best has assigned a Financial Strength Rating (FSR) of A (Excellent) and Long-Term Issuer Credit Ratings (Long-Term ICR) of "a" to Athene Co-Invest Reinsurance Affiliate International Ltd. (ACRAI) and Athene Life Re International Ltd. (ALReI). The entities are being added as members of the Athene Group and are subsidiaries of Athene Holding Ltd. (Athene) [NYSE:ATH], the publicly traded ultimate parent. All companies are domiciled in Bermuda. The outlook assigned to the FSR is stable, while the outlook assigned to the Long-Term ICRs is positive.
The ratings reflect ACRAI and ALReI’s balance sheet strength, which AM Best categorizes as very strong, as well as their strong operating performance, neutral business profile and appropriate enterprise risk management. The ratings of the Athene Group are being extended to ACRAI and ALReI due to their strategic role in the group’s expansion into international reinsurance markets, and the explicit financial support provided by the group’s affiliates and investors. ALReI will be utilized to assume pension risk transfer (PRT) business, also known as bulk payout annuity (BPA) in the United Kingdom, which then anticipates to retrocede to ACRAI through a 100% quota share agreement. ACRAI will operate under the previously established ACRA structure, which includes Athene Co-Invest Reinsurance Affiliate 1A Ltd. and Athene Co-Invest Reinsurance Affiliate 1B Ltd. The ACRA structure provides Athene with access to on-demand third-party equity capital to support new business growth. The ability to access external funding through external capital commitments provides Athene increased flexibility in executing new business transactions, but it also is expected to be accretive to consolidated earnings through management fees earned, as opposed to the interest expense of utilizing debt financing.
The outlooks of Athene’s Long-Term ICR of "bbb", its existing Long-Term Issue Credit Ratings and the Long-Term ICRs of "a" of its operating insurance subsidiaries were revised to positive from stable on May 15, 2019, and remain unchanged.
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