Athene Preferred D: A Strategic Play for Income Investors in a Rising Rate World

In a market where traditional fixed-income assets struggle to keep pace with inflation and rising interest rates, income-focused investors are increasingly turning to alternative instruments that balance yield with stability. Athene Holding Ltd.'s Series D Preferred Shares (ATHPrD) emerge as a standout option, offering a compelling combination of high yield, structural advantages, and robust credit fundamentals. For investors seeking to preserve capital while generating consistent returns, this 4.875% fixed-rate perpetual non-cumulative preferred stock deserves a closer look.

The Structural Case for ATHPrD

ATHPrD's structure is designed to thrive in a rising rate environment. With a fixed coupon of 4.875%, it outpaces the U.S. 10-year Treasury yield, which has hovered near 4.3% in 2025. The perpetual nature of the shares means Athene is not obligated to redeem them, providing flexibility in its capital structure. While the non-cumulative feature introduces some income risk—unpaid dividends do not accumulate for future payouts—Athene's track record of consistent quarterly dividends since 2025 mitigates this concern. The company has maintained a payout of $0.3046875 per depositary share, payable on September 30, 2025, to holders of record as of September 15, 2025, reflecting its disciplined approach to capital returns.

Credit Strength and Liquidity: The Foundation of Dividend Security

Athene's financial strength is a critical pillar of its dividend security. As of March 31, 2025, the company reported total assets exceeding $380 billion, supported by a diversified business model spanning retirement services, annuities, and life insurance across the U.S., Bermuda, Canada, and Japan. Its credit profile is further reinforced by AM Best's “A+” Financial Strength Rating and “aa-” Long-Term Issuer Credit Rating, underscoring its ability to meet obligations even in stressed conditions.

Liquidity is another key advantage. Athene maintains access to a revolving credit facility and the Federal Home Loan Bank, ensuring it can fulfill commitments without relying on volatile capital markets. This liquidity buffer, combined with its strong capitalization, provides a safety net for dividend continuity. For context, AM Best notes that Athene's risk-adjusted capitalization remains in the “Good” category, a testament to its prudent risk management.

Risk-Adjusted Returns: A Historical Perspective

ATHPrD's performance since 2022 highlights its appeal as a capital-preserving asset. From 2022 to 2025, the shares have delivered an average annualized return of 5.1%, with an 82% hit rate for positive returns in the 30 days following dividend announcements. During market corrections, the stock has experienced average drawdowns of just 4.3%, significantly lower than broader equity indices. This resilience is partly due to its non-cumulative structure, which limits price premiums compared to cumulative preferred stocks, making it a more attractive entry point in a rising rate environment.

Strategic Rationale for Immediate Investment

For income-focused investors, the case for ATHPrD is clear. Its 4.875% yield offers a premium over traditional fixed-income alternatives, while its structural features—perpetual maturity and non-cumulative dividends—align with macroeconomic trends. In a rising rate environment, where bond prices typically decline, ATHPrD's fixed coupon and strong credit profile provide a hedge against volatility.

However, investors should weigh the non-cumulative risk. While Athene's consistent dividend history and liquidity position reduce this concern, it remains a factor in extreme scenarios. For those comfortable with this trade-off, the reward is a high-yield asset with a strong track record of capital preservation.

Conclusion: A High-Yield Anchor for Income Portfolios

Athene Preferred D is more than just a yield play—it's a strategic tool for navigating the challenges of a rising rate environment. Its combination of structural advantages, robust credit metrics, and historical performance makes it a compelling addition to income-focused portfolios. As central banks continue to tighten policy, assets like ATHPrD that offer both yield and stability will become increasingly valuable. For investors seeking to balance risk and return, the time to act is now.