Athene plans share offering to fund reinsurance subsidiary
Athene Holding, a provider of retirement savings products, is planning an opportunistic offering of preference shares to help fund Athene Co-Invest Reinsurance Affiliate (ACRA) – its strategic capital solution.
The company has filed a preliminary prospectus, but the completion of the offering is contingent on market conditions and the terms received.
ACRA is a wholly-owned subsidiary of Athene that will participate in qualifying transactions such as block reinsurance, pension risk transfer, flow reinsurance and funding agreements, drawing two-thirds of the required capital from third-party investors.
It is intended to help its parent achieve various business objectives in an accretive manner to shareholders, minimising the potential need for additional primary issuance in future. It should eliminate the impact that undeployed, on-balance sheet capital has on key financial measures, such as return on equity.
Jim Belardi, CEO of Athene, said: “Launching a preferred stock offering is consistent with our flexible approach toward managing shareholder capital and opportunistically funding our operations with the most efficient capital available to us.”
Issuing preferred stock will diversify Athene’s capital structure, attract favorable equity treatment from rating agencies and preserve untapped debt capacity, Belardi added.
Athene’s Board of Directors has authorised a contingent increase in the company’s share repurchase capacity, to offset any near-term earnings dilution. It estimates it could buy back around 15 percent of the offering proceeds, though the final amount will be determined upon closing.
Since December 2018 Athene’s Board of Directors has authorised approximately $500m of share repurchase capacity. It has opportunistically acquired 7.8m shares of common stock for a total of $325m at an average price of $41.49 per share. There is $172m of share repurchase capacity remaining on the company’s existing authorisation.
