The counterparty credit rating on American Equity Investment Life Holding Co. (AEIL) reflects the strong growth of the operating company, supported by AEIL's substantial capital markets access and continued, aggressive asset/liability management (ALM). The ALM profile is a concern in a rising interest rate environment if policyholder withdrawals greatly exceed expectations and if surrender-charge protection provides an insufficient cushion. The company maintains an entrepreneurial focus, resulting in a low operating cost structure under a growing, seasoned management team. The company places tremendous emphasis on its relationships and service to its distributors while maintaining controls to ensure appropriate market conduct. Operating performance in 2006 was in line with expectations. Pretax GAAP operating income was $113 million and GAAP ROA was 78
