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Athene parent moves out of Bermuda

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Athene Holding company to move from Hamilton to Delaware December 31 (File photograph)

A leading Bermudian-domiciled retirement services company that issues, reinsures, and acquires retirement savings products globally is moving its holding company to Delaware by the end of the year.

Athene Holding Ltd is the parent to Athene Life Re Ltd, one of Bermuda’s largest annuity reinsurance companies.

The decision to move, made this month by the board of directors, is not expected to affect operations in Bermuda, an Athene spokeswoman assured The Royal Gazette last night.

The move to Delaware is as a result of the merger two years ago between Athene and Apollo, creating the combined entity Apollo Global Management, Inc, a high-growth alternative asset manager with asset management and retirement services capabilities.

“Athene is a full US taxpayer,“ the spokeswoman said, ”so it just made sense to redomesticate to Delaware, versus staying in Bermuda. But it has no impact at all on the Bermuda operations.“

AGM has shares of common stock listed on the New York Stock Exchange.

Jim Belardi, CEO of Athene (File photograph)

The merger, Apollo said at the time, created a superior model and Jim Belardi, CEO of Athene, was quoted: “This combination is a competitive differentiator and a growth accelerant, bringing expected benefits to all of our shareholders, policyholders and important stakeholders.”

The Athene Bermuda Group is a financial services company that has specialized in retirement services, conducting business through consolidated affiliates.

The group has insurance affiliates and third-party ceding companies which directly and indirectly reinsure a portion of their liabilities through non-US reinsurance affiliates. It also has US reinsurance affiliates, which primarily issue retirement savings products.

The decision to move the holding company to Delaware led Wednesday to Fitch Ratings downgrading the long-term rating assigned to Athene Holding Ltd's outstanding Series A, B, C, D and E preferred share issuances to “BBB-” from “BBB”.

But the Athene spokeswoman said: “That just puts it in line with our peers and is also consistent with the rating we have at other rating agencies.”

Fitch confirmed that their measures this week have no effect on Athene’s financial strength ratings and other existing ratings, and no effect on its senior unsecured notes or insurance operating affiliates.

Fitch also said: “The downgrade of the ratings assigned to Athene's outstanding preferred stock issuances follows the company's December 12 announcement that the board of directors had approved preliminary steps to redomesticate the holding company from Bermuda to the state of Delaware, and our view that non-performance risk has increased as a result.

“The redomestication has an expected effective date of December 31, 2023 following final board approval.”

Fitch added: “The regulatory environment of the US, which is assessed as being effective and classified as following a ring-fencing approach will apply following the expected close of the re-domestication.

“Accordingly, the ratings of the preferred shares are notched consistent with standard notching for ring-fenced environments as described in the insurance rating criteria, and are rated two notches below Athene's long-term issuer default rating based on ‘poor’ recovery expectations, with one additional notch for ‘minimal’ non-performance risk.

“Fitch's view of non-performance risk is consistent with the baseline assumption for a ring-fenced regulatory environment, and follows a review of the relevant legal frameworks and the authority granted to both the US group supervisor, and the Bermuda Monetary Authority’s to influence capital flows to the holding company.

“Relative to Fitch’s previous view of non-performance, and consistent with the belief that deferral features are unlikely to be triggered except in times of severe stress, we believe non-performance risk more closely resembles that of a traditional ring-fenced environment as in our view, Bermuda is now more likely to impose additional restrictions on the movement of capital to an offshore holding company in a severe stress environment.

“Based on Fitch's insurance rating criteria the outstanding preferred shares will continue to receive 100 per cent equity credit when evaluating financial leverage.”

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Published December 28, 2023 at 8:00 am (Updated December 29, 2023 at 8:17 am)

Athene parent moves out of Bermuda

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