On July 1, 2008, Standard&Poor's Ratings Services revised its outlook on American Equity Investment Life Holding Co. (AEIL) and its operating company, American Equity Investment Life Insurance Co. (AEL), to negative from stable. At the same time, Standard&Poor's affirmed its 'BB+' counterparty credit rating on AEIL and its 'BBB+' counterparty credit and financial strength ratings on AEL. We revised the outlook to negative to reflect a new proposal by the SEC to regulate the principal product sold by AEL. Although all companies selling the affected product are subject to the same risks, most have a more diversified business model with less reliance on this particular product. Such regulation could require AEL to adopt or revamp its
