KBRA Assigns Preliminary Rating to Knighthead Annuity & Life Assurance Company's Prescribed Capital Notes
KBRA assigns a BBB+ preliminary long term credit rating for up to $100 million of twenty-year prescribed capital notes (Notes) to be issued by Knighthead Annuity & Life Assurance Company (KHAL). The Outlook for the preliminary rating is Stable.
Key Credit Considerations
KHAL plans to use the proceeds from the issuance for general corporate purposes, including assumption of additional reinsurance and M&A. KHAL’s capitalization strengthened meaningfully in 2025, supported by retained earnings and capital contributions. The Notes are expected to further enhance regulatory and financial flexibility. KBRA's pro forma prescribed capital note leverage remains manageable under KBRA’s $100 million issuance assumption and pro forma debt service coverage remains strong under both earnings-based and conservative cash-based measures. Subject to prior approval of the Cayman Islands Monetary Authority (CIMA), KHAL has paid all required interest on its current outstanding prescribed capital notes since issuance in October 2022. The Notes are deeply subordinated to policyholders, claimants, beneficiaries, and other creditors, rank pari passu with existing and future prescribed capital notes issued by KHAL, and require CIMA approval for interest, principal, and redemption payments.
