Insurance/annuity company Athene Holdings has announced a new issuance of fixed rate reset preferred stock. Athene is owned by Apollo Global Management (APO)
The company has other issues of preferreds outstanding which can be seen here.
This new issue should be investment grade. The coupon will be fixed until 12/30/2027 after which it will be reset at the 5 year treasury plus a yet to be announced ‘spread’—then every 5 years thereafter.
The preliminary prospectus can be read here.
J was on top of this one.
Term sheet (FWP):
https://www.sec.gov/Archives/edgar/data/1527469/000119312522298471/d381266dfwp.htm
Temp ticker ATHLV:
https://otce.finra.org/otce/dailyList?viewType=Additions
12/05/2022 13:56:25
12/05/2022 00:00:00
ATHLV
ATHENE HLDG LTD DEPOSITARY SH REPSTG 1/1000TH INT FIXED RESET PERPETUAL NON (CUM PREF SHS) Depositary Shares
(1) I assume that I’ll be unable to trade it on E*Trade until it gets a bid and ask.
(2) Other recent IPO temp tickers changed after a day or two, with the 5th letter changing from “V” to “P”. So this may soon become ATHLP.
So isn’t ATH completely owned by Apollo? Whatever, in this market I wouldn’t be surprised if some shenanigans…..
They have been poorly priced for a long time. I’d imagine this gives LNC.D a run of yield.
I don’t have a Moody’s or S&P account, but QOL shows AAM-A / B as not rated, and the Athena preferreds at BBB
On Tim’s master list, it shows AAM – A/B as BBB+ and the Athena’s at BBB-
Since these are all under the Apollo umbrella, do I just have incorrect info, or are there actually different ratings for each?
Same S&P rating, but no rating for AAM preferreds at Moody’s:
AAM preferred S&P BBB Moody’s no rating
ATH preferred S&P BBB Moody’s Baa3 (hyb)
Mark – FYI registering to login at both Moody’s and S&P is free and well worth it…
Hi Mark–thanks for pointing this out. The individeual security page had BBB and I have updated the ‘sheets’.
I own just a bit of some Athene preferred stock. I believe it suffers from “PSB syndrome”.
Namely, it’s publicly traded preferred stock from a company that was bought out by a private equity firm. What would stop Apollo from delisting the preferred stocks down the road, and tendering it at a 30-40% discount to par?
Admittedly, while PSB and Athene are both “financial” companies, industrial properties and insurance are two very different industries. I would guess that insurance companies would suffer more from reputational risk, if they screwed their preferred stockholders.
Does the fact that they are issuing more preferred stock mean that Apollo won’t screw preferred stocks holders, if only because they want/need to issue more preferred stock down the road?
I don’t know, but I don’t want to risk a lot of money to find out. Do you? If this isn’t the reason, why do the existing Athene preferreds still yield around 6.5% ?
donocash–like you I have just a bit of Athene’s preferreds–not anxious to hold piles of it for the reason you mention. While I have to give up some yield there are many available issues where we don’t have to worry about it.
I have no idea what Athene will do, but IMHO, being an insurance co. (as opposed to any other type of company) provides no protection to preferred investors. For example, look back at Maiden Holdings (MHLD) and AmTrust Financial (AFSI). Both are insurance players whose preferreds were raided by the same group of scum.
Again, I am not saying anything about Athene, only that there be pirates out there in any industry.