The issuer credit rating on American Equity Investment Life Holding Co. (AEL) reflects Standard & Poor's Ratings Services' concern about the quality of capital and earnings at both the operating companies and the holding company. This is because of the increased use of hybrids as well as the continued, but improved, aggressive asset/liability management and interest rate risk that also cause volatility (although recently reduced after the IPO) of the GAAP equity and deferred acquisition cost assets in a rising interest rate environment. As a result, the company's economic long-term profitability could be affected if interest rates rise rapidly in the near term or if there is a flattening of the yield curve. Despite these negatives, there are many improving
