IOWA
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001-31911
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42-1447959
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(State
or Other Jurisdiction of
Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification
No.)
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5000
Westown Parkway, Suite 440, West Des Moines, Iowa
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50266
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(Address
of Principal Executive Offices)
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(Zip
Code)
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•
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The
loan to value ratio at inception must be at or below 75%, and we
target a
weighted average loan to value of 68% each
year.
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We
obtain independent appraisals and ensure that conservative valuation
methodologies have been utilized.
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On
a
weighted average basis, the borrowers’ net operating income excluding
depreciation must exceed the debt service requirements of the loans
by at
least 1.35 times.
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One
third of loans have personal recourse to the borrowers, and many
borrowers
already have a successful loan history with
AEL.
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•
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We
require the borrower to have hard cash equity in the property equal
to at
least 25% of value in most cases.
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We
target fully amortizing loans, with no interest only loans
permitted.
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•
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We
focus on smaller loans. Our total portfolio is comprised of 723
loans with an average size of $2.5
million.
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•
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We
require diversification by property type and geographic
region. High risk industries or areas are
avoided.
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Collateral
Type
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Amortized
Cost
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Estimated
Fair
Value
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Average
Loan to
Value
at
Origination
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|||||||||
Government
Agency
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$ |
76.1
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$ |
75.1
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74.9%
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|||||||
Prime
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415.5
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396.8
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64.3%
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Alt-A
pre-2005
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51.2
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47.0
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69.5%
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Alt-A
2005 to present
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109.3
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108.1
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72.9%
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Other
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5.7
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4.6
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89.6%
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$ |
657.8
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$ |
631.6
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•
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The
unrealized decline in market value of $26.2 million is predominantly
related to changes in interest rates not credit
concerns.
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•
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One
security with an amortized cost of $2.8 million and unrealized
decline in
market value of $0.7 million has been placed on the watch list
for
potential credit concerns.
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•
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No
exposure to subprime mortgage-backed securities or CDO/SIVs backed
by
residential mortgages.
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•
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99%
of all residential MBS securities are in the highest tranche of
the pool
in which they are structured.
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•
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Of
the Alt-A securities originated in 2005 or later, 72% are super
senior
tranches, with much more subordination beneath the tranche than
is
required for a AAA rating.
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•
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Delinquency
experience is well below the level that would jeopardize the value
of
AEL’s securities.
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Due
to seasoning of the pools through principal payments and pre-payments
each
and every MBS security AEL owns has a higher percentage of subordination
supporting our tranche than at
origination.
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AMERICAN
EQUITY
INVESTMENT
LIFE HOLDING COMPANY
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By:
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/s/
Wendy L. Carlson
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Wendy
L. Carlson
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Chief
Financial Officer and General
Counsel
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