AEL receives upgraded rating following acquisition by Brookfield Reinsurance

Brookfield Reinsurance has reported that its recently acquired subsidiary, American Equity Investment Life Insurance Company (AEL), has been upgraded in its insurer financial strength (IFS) rating by S&P Global Ratings (S&P) to “A” from “A-”.

The upgrade, the reinsurer said, highlights AEL’s integral role within the Brookfield Reinsurance group, supported by the group’s robust capital and earnings strength.

Similarly, the IFS rating of American National Insurance Company was also affirmed at “A”, with the removal of the credit watch status following Brookfield Reinsurance’s finalization of its acquisition of American Equity Investment Life Holding Company (AEILHC).

Consequently, AEILHC’s senior bonds have been upgraded to “BBB” from “BBB-”, and its outstanding preferred shares now carry a “BB+” rating, up from “BB”. Additionally, the rating for the existing senior bonds of American National Group LLC remains at “BBB”, with the credit watch also removed.

Fitch Ratings has similarly adjusted its assessments, elevating AEILHC’s senior unsecured notes to “BBB” from “BBB-” and upgrading its preferred shares to “BB+” from “BB”.

This series of upgrades and reaffirmations reflects a positive shift in the financial outlook for the entities under Brookfield Reinsurance’s umbrella following strategic acquisitions and operational integrations.

“We are excited to move toward closing this transaction and begin the work of building AEL into a leader in the US annuity markets,” Sachin Shah, the chief executive officer of Brookfield Reinsurance, said previously.

Elsewhere, Brookfield Asset Management, Brookfield Reinsurance’s parent firm, has also recently entered a partnership with Castlelake LP to secure a majority of the private debt firm’s fee-related earnings.

Valued at $1.5 billion, the deal involves Brookfield’s reinsurance arm allocating funds into Castlelake’s strategies. That said, despite the new arrangement, Castlelake maintains its autonomy and continues to hold the majority of earnings linked to its performance.

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