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

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.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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