A.M. Best Affirms Credit Ratings of American Equity Investment Life Insurance Company and Its Subsidiaries

A.M. Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of "a-" of American Equity Investment Life Insurance Company (AEILIC) and its subsidiaries, American Equity Investment Life Insurance Company of New York (Lake Success, NY) and Eagle Life Insurance Company, collectively referred to as AEL. Concurrently A.M. Best has affirmed the Long Term ICR of "bbb-" of American Equity Investment Life Holding Company AEL and its existing Long Term Issue Credit Ratings (Long-Terms IRs). The outlook for all of these Credit Ratings (ratings) is stable. All companies are domiciled in West Des Moines, IA, unless otherwise specified. (Please see below for detailed listing of the Long-Term IRs).

The ratings reflect AEL's balance sheet strength, which A.M. Best categorizes as adequate, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

AEL has adequate risk-adjusted capital supported by a high quality of capital as AEL has limited use of surplus notes, no other debt at the operating entity and an appropriate use of reinsurance. Despite the decline in direct written premiums, AEL maintains a leadership position in the fixed-index annuity (FIA) market. Management has shown effective strategies in managing its spreads and hedging its equity risk exposure, which has led to strong operating trends on both a GAAP and statutory basis, with current and historical statutory returns above the life and annuity industry average.

An offsetting rating factors is AEL's significant concentration in FIAs with living benefits, with continued regulatory scrutiny despite resolution from the U.S. Department of Labor. AEL operates in the highly competitive FIA marketplace, in which potential exists for competitors to react aggressively and increase participation/cap rates or provide more generous living benefits.

The following Long-Term IRs have been affirmed:

American Equity Investment Life Holding Company

— "bbb-" USD 500 million 5% senior unsecured notes due 2027

The following indicative Long-Term IRs under the shelf registration have been affirmed:

American Equity Investment Life Holding Company

— "bbb-" on senior unsecured debt

— "bb+" on subordinated debt

— "bb" on preferred stock

American Equity Capital Trust V and VI

— "bb" on trust preferred securities

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20180627006318/en/