Athene Prices $500 Million Investment Grade Junior Subordinated Debentures Offering
- None.
- None.
Insights
The issuance of $500 million in junior subordinated debentures by Athene Holding Ltd. is a noteworthy event for investors, as it reflects the company's capital raising activities and has implications for its capital structure. The fixed-rate reset feature indicates that while the initial interest rate is set at 7.250%, it may be subject to change based on predefined terms at specified intervals. This could affect the desirability of the debentures in different interest rate environments.
Furthermore, the option for underwriters to purchase an additional $75 million to cover over-allotments provides flexibility and could indicate strong market demand. The intended use of proceeds for general corporate purposes and capital contributions to insurance subsidiaries suggests Athene is positioning itself for expansion and bolstering its financial health, which could be favorable for long-term growth.
Listing the debentures on the NYSE enhances their liquidity, potentially making them more attractive to a broader range of investors. However, the long maturity date of 2064 introduces significant duration risk, as investors are exposed to changes in interest rates and the company's creditworthiness over a long period.
The involvement of prominent financial institutions such as Wells Fargo Securities and J.P. Morgan as joint book-running managers, along with other notable firms as joint lead managers, suggests a robust underwriting process and could signal confidence in Athene's creditworthiness and market reputation.
The debenture's high fixed interest rate of 7.250% may reflect current market conditions and investor expectations for higher yields amidst a potentially rising interest rate environment. This rate must be evaluated against the backdrop of the insurance industry's financial performance and the broader economic climate, which can influence investor sentiment and the success of the offering.
Investors will also assess the impact of the capital infusion on Athene's leverage ratios and regulatory capital requirements, which are critical for insurance companies. The additional capital could enhance Athene's ability to underwrite new insurance policies, which is a positive indicator of organic growth potential.
From a legal standpoint, the offering is conducted under an effective shelf registration statement filed with the SEC, which enables Athene to offer and sell securities to the public without a lengthy registration process for each issuance. This demonstrates regulatory compliance and efficient capital market access.
It is important to note that the press release clearly states that the offering is not an invitation to buy and is subject to regulatory constraints, emphasizing the legal requirements surrounding securities offerings. Investors must rely on the prospectus and related prospectus supplement for detailed information, which are key documents for due diligence.
The long-term nature of the debentures and the legal stipulations that govern them, such as the fixed-rate reset mechanism, will be detailed in these documents. This mechanism can affect the investment's return profile over time, which is a crucial consideration for stakeholders.
WEST DES MOINES, Iowa, Feb. 29, 2024 (GLOBE NEWSWIRE) -- Athene Holding Ltd. (“Athene”) today announced it has agreed to sell
Athene intends to use the net proceeds from the offering (including the net proceeds available from any exercise of the underwriters’ over-allotment option to purchase additional debentures) for general corporate purposes, including capital contributions to its insurance subsidiaries to support organic growth.
Wells Fargo Securities, BofA Securities, J.P. Morgan and Morgan Stanley are acting as joint book-running managers for the offering. Apollo Global Securities, LLC, Barclays Capital Inc., Goldman Sachs & Co. LLC, RBC Capital Markets, LLC, SMBC Nikko Securities America, Inc. and Bancroft Capital, LLC are acting as joint lead managers for the offering.
The debentures are being offered pursuant to an effective shelf registration statement that has previously been filed with the Securities and Exchange Commission (the “SEC”). This press release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offer, or solicitation to buy, if at all, will be made solely by means of a prospectus and related prospectus supplement filed with the SEC. You may obtain these documents without charge from the SEC at www.sec.gov. Alternatively, you may request copies of these materials from the joint book-running managers by contacting Wells Fargo Securities, LLC toll-free at (800) 645-3751, BofA Securities, Inc. toll-free at (800) 294-1322, J.P. Morgan Securities LLC collect at (212) 834-4533 or Morgan Stanley & Co. LLC toll-free at (866) 718-1649.
About Athene
Athene is a leading retirement services company with
Forward-Looking Statements
This press release contains, and certain oral statements made by Athene's representatives from time to time may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are subject to risks, uncertainties and assumptions that could cause actual results, events and developments to differ materially from those set forth in, or implied by, such statements. These statements are based on the beliefs and assumptions of Athene's management and the management of Athene's subsidiaries. Generally, forward-looking statements include actions, events, results, strategies and expectations and are often identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans,” “seeks,” “estimates,” “projects,” “may,” “will,” “could,” “might,” “should,” or “continues” or similar expressions. Forward-looking statements within this press release include, but are not limited to, statements regarding future growth prospects and financial performance. Although Athene management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to be correct. For a discussion of other risks and uncertainties related to Athene’s forward-looking statements, see its annual report on Form 10-K for the year ended December 31, 2023, which can be found at the SEC’s website www.sec.gov. All forward-looking statements described herein are qualified by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Athene does not undertake any obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
Contact:
Media Contact
Jeanne Hess
VP, External Relations
+1 646 768 7319
jeanne.hess@athene.com
FAQ
What is the total amount of debentures Athene is selling?
What is the ticker symbol under which the debentures will be listed?
What will Athene use the net proceeds from the offering for?
Who are the joint book-running managers for the offering?
What is the expected closing date of the offering?
