AM Best Affirms Credit Ratings of Equitable Holdings, Inc. and Its Life Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of Equitable Financial Life Insurance Company of America (EFLICOA) (Phoenix, AZ) and Equitable Financial Life Insurance Company (EFLIC) (New York, NY). EFLICOA and EFLIC collectively are referred to as Equitable Life Group. Concurrently, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) and the Long-Term Issue Credit Ratings (Long-Term IRs) of Equitable Holdings, Inc. (Delaware). The outlook of these Credit Ratings (ratings) is stable. (Please see below for a detailed listing of the Long-Term IRs.)

The ratings reflect Equitable Life Group’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

Equitable Life Group’s ratings are attributable to its appropriate level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). While there could be some volatility year-over-year, AM Best notes that the group has strong overall liquidity with excess cash at the holding company. The overall balance sheet strength continues to be supported by Equitable Life Group’s appropriate financial flexibility and its well-developed and sophisticated risk management practices, as well as its position as one of the market leaders in variable annuities (VA), variable universal life and 403(b) retirement annuities. In addition, the group maintains a dynamic hedging strategy to support its VA liabilities. Through its growing partnership with AllianceBernstein, Equitable Life Group continues to maintain a significant global asset management footprint, which provides a growing material source of unregulated cash flow to the holding company.

Additionally, the group has consistently recorded favorable operating earnings in the last several years on a non-GAAP operating basis with some recent volatility. The after-tax non-GAAP financial measure is used to evaluate financial performance on a consolidated basis, determined by making certain adjustments to consolidated after-tax net income attributable to holdings that relate to derivative positions, which has continued to be a large source of volatility in net income. AM Best notes that the holding company maintains access to a contingent capital facility, which further enhances the group’s positive financial flexibility. Equitable Life Group also benefits from a diversified and productive distribution model, which includes a large captive distribution channel, as well as extensive third-party distribution relationships.

Equitable Life Group remains exposed to equity market pressures on both sides of its balance sheet. While a majority of new sales for the company are non-interest sensitive in nature there still remains volatility due to its variable insurance products with guaranteed benefits, as well as revenue from asset fees, as a result of market value changes in its large separate account book of business and derivative activity. AM Best will continue to closely monitor any large swings in either balance sheet strength or earnings from operations and its overall impact on the company.

The following Long-Term IRs have been affirmed with stable outlooks:

Equitable Financial Life Global Funding— “a+” (Excellent) program rating

— “a+” (Excellent) on all outstanding notes issued under the program

Equitable Holdings, Inc—

— “bbb+” (Good) on $500 million 5.594% senior unsecured fixed rate, due 2033

— “bbb+” (Good) on $1.5 billion 5.0% senior unsecured fixed rate, due 2048

— “bbb+” (Good) on $1.5 billion 4.35% senior unsecured fixed rate, due 2028

— “bbb+” (Good) on $350 million 7.0% senior unsecured debentures, due 2028

(originally issued by AXA Financial, Inc.)

— “bbb-” (Good) on $800 million 5.25% preferred stock

— “bbb-” (Good) on $500 million 4.95% preferred stock

— “bbb-” (Good) on $300 million 4.30% preferred stock

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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