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A.M. Best Assigns Debt Rating to American Equity Investment Life Holding Companya?s New Senior Convertible Notes

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  Published in Business and Finance on Friday, September 24th 2010 at 7:45 GMT by Market Wire
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OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has assigned a debt rating of abbb-a to the $200 million 3.5% senior unsecured convertible notes due in 2015 of American Equity Investment Life Holding Company (AEL) (Des Moines, IA) (NYSE: AEL). The assigned outlook is negative, which is consistent with all the ratings of AEL and its operating insurance subsidiaries.

"A.M. Besta™s Ratings & the Treatment of Debt"

The notes were priced on September 16, 2010, and the transaction closed on September 22, 2010. The proceeds from the issuance will be used to pay down the companya™s existing line of credit, costs of the convertible note hedge transaction, and if conditions are favorable, pay down existing debt.

Following the issuance of these notes, the pro forma total debt-to-capital ratio is 32.0%, which is a modest increase from recent historical trends. AELa™s financial leverage and coverage ratios remain within A.M. Besta™s guidelines for its debt ratings and are expected to remain so over the near term.

The principal methodologies used in determining these ratings is [ Besta™s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition ], which provides a comprehensive explanation of A.M. Besta™s rating process and highlights the different rating criteria employed. Additional key criteria utilized include aA.M. Besta™s Ratings & the Treatment of Debta and aEquity Credit for Hybrid Securities.a Methodologies can be found at [ www.ambest.com/ratings/methodology ].

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit [ www.ambest.com ].