On Aug. 27, 2003, Standard & Poor's Ratings Services affirmed its 'BB+' counterparty credit rating on American Equity Investment Life Holding Co. (AEI). At the same time, Standard & Poor's affirmed its 'BBB+' counterparty credit and financial strength ratings on AEI's operating subsidiary, American Equity Investment Life Insurance Co. (AEILIC). The outlook on all these companies is negative. The financial strength rating on AEILI reflects its good business position in the annuity industry for its chosen markets, improving profitability and capitalization, extremely strong liquidity, seasoned management team and, and high-quality investment portfolio. These strengths are offset by the adequate but lower than expected quality of the capital, the holding company's high debt plus preferred to capital ratio, volatility of its
