Item 1.01. Entry into a Material Definitive Agreement.
On July 1, 2022, Athene Holding Ltd. (the “Company”) and Athene Life Re Ltd., a wholly-owned indirect subsidiary of the Company (“Athene Life Re” and, together with the Company, the “Borrowers” and individually, a “Borrower”), entered into a credit agreement with a syndicate of banks, including Wells Fargo Bank, National Association, as administrative agent (“Administrative Agent”), and the other lenders named therein (the “Credit Agreement”). The Credit Agreement allows for borrowings of up to $2.30 billion, subject to being increased to up to $3.00 billion on the terms described in the Credit Agreement, on a revolving basis.
The Credit Agreement is being entered into to facilitate and optimize the Borrowers’ available financing commitments for liquidity and working capital needs to meet short-term cash flow and investment timing differences of the Borrowers and certain of their subsidiaries. The Borrowers expect to utilize borrowings under the Credit Agreement on a regular basis in the ordinary course of business.
The Company’s existing credit agreement dated as of December 3, 2019 remains outstanding and available for use by the Company, Athene Life Re, certain other subsidiaries of the Company (together with the Company and Athene Life Re, collectively, the “Citi Borrowers”). The Citi Borrowers entered into such agreement with the financial institutions from time to time party thereto as lenders and Citibank, N.A. as administrative agent for such lenders.
The Credit Agreement is unsecured and has a commitment termination date of June 30, 2023, subject to any extensions of additional 364-day periods with the consent of extending lenders and/or “term-out” of outstanding loans (by which, at the election of the Company, the outstanding loans may be converted to term loans which shall have a maturity of up to one year after the original maturity date), in each case in accordance with the terms of the Credit Agreement. In connection with the Credit Agreement, Athene Life Re entered into a Guaranty, dated as of July 1, 2022 (the “Guaranty”), with the Administrative Agent, pursuant to which Athene Life Re guaranteed all of the obligations of the Company under and in respect of the Credit Agreement and the other loan documents related thereto. Interest accrues on outstanding borrowings under the Credit Agreement at a rate per annum equal to either: (i) the Adjusted Term SOFR (as defined in the Credit Agreement) plus a margin determined on a sliding scale from 1.000% to 1.250% based on the Financial Strength Rating (as defined in the Credit Agreement) of Athene Life Re (currently 1.100%) or (ii) the Base Rate (as defined in the Credit Agreement) plus a margin determined on a sliding scale from 0.000% to 0.250% based on the Financial Strength Rating of Athene Life Re (currently 0.100%). Under the Credit Agreement, the Borrowers pay a fee on undrawn commitments on a sliding scale from 0.100% to 0.175% based on the Financial Strength Rating of Athene Life Re (currently 0.125%). These fees adjust automatically in the event of the public announcement of a change in Athene Life Re’s Financial Strength Rating.
The Credit Agreement contains a number of customary representations and warranties and affirmative and negative covenants, including covenants restricting, subject to certain exceptions, the following:
•the ability of material subsidiaries to incur additional indebtedness and make guarantees;
•the ability to create liens on the Borrowers’ assets and on the equity interests of material subsidiaries;
•the ability of any Borrower or any material subsidiary to make fundamental changes;
•the ability of any Borrower or any subsidiary to engage in certain transactions with affiliates; and
•the ability to make changes in the nature of the Borrowers’ business.
The Credit Agreement also includes a financial covenant consisting of a requirement for Athene Life Re to maintain a minimum Consolidated Net Worth (as defined in the Credit Agreement) equal to $9,326,100,000. Further, the Credit Agreement contains customary events of default, subject to certain materiality thresholds and grace periods for certain of those events of default. The events of default include payment defaults, covenant defaults, material inaccuracies in representations and warranties, certain cross-defaults, bankruptcy and liquidation proceedings and other customary defaults. Upon an event of default, the Credit Agreement provides that, among other things, the commitments may be terminated and the loans then outstanding may be declared due and payable.
The foregoing description of the Credit Agreement and the Guaranty do not purport to be complete and are qualified in their entirety by reference to the complete text of the Credit Agreement and the Guaranty, which are filed as Exhibit 10.1 and Exhibit 10.2 hereto, respectively, and are each incorporated herein by reference.