AM Best Assigns Issue Credit Rating to Knighthead Annuity & Life Assurance Company’s Newly Issued Surplus Notes

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Long-Term Issue Credit Rating of “bbb” (Good) to the newly issued $50 million 9.375% surplus notes due 2042 issued by Knighthead Annuity & Life Assurance Company (Knighthead Annuity) (Cayman Islands). The outlook assigned to the Credit Rating (rating) is stable.

The proceeds from this debt issuance are expected to be used for general corporate purposes, including assumption of additional reinsurance and merger & acquisition activity. AM Best notes that Knighthead Annuity’s financial leverage will increase modestly, remaining well within AM Best’s guidelines for its current rating. AM Best views Knighthead Annuity’s debt-servicing capabilities favorably, with sufficient liquidity to service its debt and access to additional capital through its holding company.

AM Best notes that these surplus notes are to be issued by a Cayman-domiciled life insurance company. The notes have similar characteristics as traditional notes issued in the United States and repayment of interest, principal and any redemption related to the notes may be made only with the prior approval from the Cayman Islands Monetary Authority. The notes are subordinate to the claims of the policyholders, claimants and beneficiaries, as well as all other Knighthead Annuity creditors. The company has the option to redeem all or a portion of the note after 10 years, in 2032.

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