Fitch Ratings has placed the 'BBB+' Insurer Financial Strength (IFS)
rating of Athene Annuity & Life Assurance Company (Athene) on Rating
The rating action follows today's announcement that Athene will be
entering into an agreement to acquire Presidential Life Corporation
(NASDAQ: PLFE) and its wholly owned subsidiary, Presidential Life
Insurance Company (Presidential). The company expects to finance the
purchase price of approximately $415 million with internal resources.
While Fitch views this transaction as consistent with expectations that
Athene would deploy capital to grow its fixed annuity business, Fitch is
concerned with the pace of transactions Athene has initiated since 2011
and the company's ability to fully integrate each new acquisition. Given
the company's limited track record Fitch will continue to monitor the
company's operating results in relation to management's initial
Fitch anticipates resolving the Rating Watch after completing a thorough
review of Presidential Life and following further discussions with
management regarding operational and strategic plans. Fitch notes that
Presidential's earnings have been impacted by the company's high minimum
crediting rates in the low interest rate environment so the agency needs
greater clarity regarding Athene's plans to improve earnings. Upon
resolution of the Rating Watch, Fitch's expectation is that Athene's
rating will either be affirmed at its current level or downgraded one
The key rating triggers that could result in a return to a Stable
--Completion of review of Presidential Life to ensure run-rate
profitability and capitalization are commensurate with the current
--Sustained maintenance of risk-based capital (RBC) above 350%;
--Broad, sustained profitability and diversification in reinsured
The key rating triggers that could result in a downgrade include:
--Decline in RBC below 300%
--Deterioration in the performance of reinsured blocks, resulting in
run-rate operating losses for four consecutive quarters.
Additional information is available at 'www.fitchratings.com'.
The ratings above were solicited by, or on behalf of, the issuer, and
therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Insurance Rating Methodology' (Sept. 22, 2011).
Insurance Rating Methodology
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Fitch RatingsPrimary AnalystTana M. Higman, +1-312-368-3122DirectorFitch,
Inc.70 W. Madison StreetChicago, IL 60602orSecondary
AnalystBradley S. Ellis, CFA, +1-312-368-2089DirectororCommittee
ChairpersonBrian C. Schneider, CPA, +1-312-606-2321Senior
DirectororMedia Relations:Brian Bertsch,
Source: Fitch Ratings