A.M. Best has assigned a debt rating of “a-” to the $1.0 billion
Series E senior component debentures of MetLife, Inc. (MetLife)
(New York, NY) [NYSE: MET]. The outlook assigned is stable. The
securities have been remarketed in two tranches in a transaction that is
expected to settle on October 7, 2014. (Please see below for a detailed
listing of debt ratings.)
The Series E debentures were originally issued in November 2010, and
formed part of MetLife’s 40 million common equity units that were issued
in connection with MetLife’s acquisition of American Life Insurance
Company and Delaware American Life Insurance Company. In
September 2012, $1.0 billion Series C senior debentures were remarketed
in two tranches -- $500 million due December 2017 and $500 million due
December 2022. In September 2013, Series D senior debentures were
remarketed with the securities having a stated maturity of September
2023.
Proceeds of the remarketing will be paid to the holders of the common
equity units who participated in the remarketing. MetLife will
ultimately receive $1.0 billion in the aggregate from the proceeds of
the remarketing (and from holders that elected not to participate in the
remarketing) in return for delivering newly-issued shares of MetLife
common stock to all holders of common equity units upon settlement of
the related stock purchase contracts. A.M. Best notes that MetLife’s
adjusted financial leverage is minimally impacted by this transaction
and is expected to remain below 30% in the near to medium term.
Moreover, MetLife’s financial flexibility remains strong and interest
coverage is expected to be in the 5-7 times range for 2014.
The following debt ratings have been assigned:
MetLife, Inc.—
-- “a-” on $500 million 1.903% senior unsecured debentures to be due
December 2017
-- “a-” on $500 million 4.721% senior unsecured debentures to be due
December 2044
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Best’s Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
Additional key criteria utilized include:
• Analyzing Insurance Holding Company Liquidity
• Equity Credit For Hybrid Securities
• Insurance Holding Company and Debt Ratings
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
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