Athene In Deal With Voya Financial To Reinsure $19 Bln Annuity Liabilities

(RTTNews) - Athene Holding Ltd. (ATH) announced Thursday that it has entered into an agreement with Voya Financial (VOYA) to reinsure approximately $19 billion of fixed and fixed indexed annuity liabilities.

Athene said it has secured the rights to reinsure liabilities that will be created from the subsequent annuitization of certain of Venerable's variable annuities to fixed payout annuities which is estimated to total approximately $8 billion over the life of the block, ensuring a significant flow of future liabilities for Athene on an annual basis.

It was also announced that a consortium of investors, led by affiliates of Apollo Global Management, LLC (APO), Crestview Partners and Reverence Capital Partners, has agreed to purchase Voya Insurance and Annuity Company, including its Closed Block Variable Annuity segment. They will create a newly formed standalone entity, Venerable Holdings, Inc., that will administer the fixed and variable annuity blocks. Athene will make a $75 million minority equity investment in Venerable to be held as an alternative investment.

Prior to the closing of this transaction, Athene will evaluate a range of potential debt financing alternatives which may provide an attractive option for the company in the current low rate environment.

The transaction, which is expected to close in the second or third quarter of 2018, is subject to regulatory approvals and other customary closing conditions.

Jim Belardi, CEO of Athene, said, "The large block of fixed annuities we will be reinsuring are products Athene understands well, and they present a meaningful asset redeployment opportunity. Amid a historically tight credit spread environment, we expect this transaction to achieve our mid-teens return target, leaving us well-positioned for incremental value creation in a more favorable credit spread environment or through enhanced asset management."