Standard & Poor's lowered its counterparty credit and senior unsecured debt ratings on Iowa-based American Equity Investment Life Holding Co. to double-'B'-plus from triple-'B'-minus on July 12, 2002. At the same time, Standard & Poor's lowered its counterparty credit and financial strength ratings on American Equity Investment Life Insurance Co. (AEI) to triple-'B'-plus from single-'A'-minus. The outlook on both companies is negative. These rating actions are based on Standard & Poor's concern about the financial flexibility of the holding company during the current economic environment given its high leverage position. In addition, Standard & Poor's believes that volatility in the company's GAAP equity because of changes in interest rates could adversely affect the perception of the company's financial condition. Also,
