Presidential Life Corporation to Merge with Athene Holding Ltd.

by John Darer® CLU ChFC MSSC RSP CLTC

Presidential Life Corporation (“Presidential Life”), a  Delaware corporation headquartered in Nyack, NY, and Athene Holding Ltd. (“Athene”), a Bermuda-based holding company, today announced a definitive agreement for an Athene subsidiary to acquire Presidential  Life for $14.00 per share in cash, representing an aggregate purchase price of approximately $415 million.  Under the terms of the agreement,

Presidential Life, which markets and sells a variety of fixed annuity, life insurance and accident and health insurance products through its wholly owned subsidiary, Presidential Life Insurance Company, a former structured settlement annuity issuer in the 1980s and early 1990s, will be acquired by Athene’s wholly owned subsidiary, Athene Annuity & Life Assurance Company (“Athene Annuity”),  a Delaware-domiciled insurer focused on retail fixed and index annuity sales and reinsurance.   

Presidential Life, Athene Annuity and Eagle Acquisition Corp. a newly formed wholly owned subsidiary of Athene Annuity, have entered into an Agreement and Plan of Merger, dated July 12, 2012,  pursuant to which Eagle will merge with and into Presidential Life,  with Presidential Life surviving the merger as a wholly owned subsidiary of Athene Annuity.   The deal is subject to te relevant regulatory approvals and is due to close before the end of 2012. (Source:Business Wire)

The brand Athene Annuity entered the retail annuty market in July 2011, although its roots go back over 100 years. It was formerly called Liberty Life Insurance Company**. It holds a B++ (good)  rating from A.M. Best.

For the first quarter of 2012 its 7 year market value adjusted annuity was named one of the five best selling annuities in the United States. 

 IMPORTANT NOTICE

** Liberty Life Insurance Company is no relation to Liberty Life Assurance Company of Boston, a current issuer of structured settlement annuities and funding instruments for non qualified assignments, which is  a subsidiary of Liberty Mutual Insurance Company. 

INTERESTING TIDBIT AND OBSERVATION A September 8, 1991 article by Eric N. Berg of the New York Times stated that by the end of 1990, more than 50% of Presidential Life's assets were invested in junk bonds, representing 12 times its capital and surplus. This was on par with Executive Life.

Yet 22 years later, unlike Executive Life Insurance Company of New York

1. Presidential Life Insurance Company WAS NOT subject to a take over by the New York Insurance Department ( now Department of Financial Services) or a 'houseguest' of the New York Liquidation Bureau
2. Presidential Life Insurance Company is still a going concern
3. All of Presidential Life structured settlement annuity holders have been paid 100% of their payments and ARE NOT subject to shortfalls.