OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned a Long-Term Issue Credit Rating of “bbb” to the $500 million 5.875% fixed-to-floating rate non-cumulative preferred stock, Series D recently issued by MetLife, Inc. (MetLife) (headquartered in New York, NY) [NYSE: MET]. The outlook assigned to the Credit Rating (rating) is stable.
Proceeds from the sale of the preferred shares will be utilized primarily for general corporate purposes, including to fund the repurchase of existing debt. The Series D fixed-to-floating-rate securities are perpetual, but the dividends are not cumulative or mandatory. The shares also are redeemable: in whole at a redemption price of $1020 plus accrued and unpaid dividends prior to March 18, 2028, in the case of a rating agency event; or in whole prior to March 15, 2028, in the case of a regulatory capital event; or in whole or in part on or after March 18, 2028, in each case, at a redemption price of $1000 plus accrued and unpaid dividends.
A.M. Best notes that MetLife’s pro forma financial leverage is in the 25% range and is expected to decline somewhat over the near term as existing debt matures. Additionally, MetLife’s financial flexibility remains strong despite relatively low interest coverage of 3.5 times.
MetLife’s ratings recognize its diverse business mix, generally favorable operating results, strong franchise, considerable scale and prominent market positions across several product lines. MetLife continues to generate consistent revenue and cash flows, and has reported growth in operating earnings across the majority of its core segments. Overall operating results improved in 2017 versus the prior period despite headwinds from low interest rates and costs associated with the spin-off of Brighthouse. A.M. Best notes that MetLife’s earnings have benefited from higher net investment income and asset-based fee revenues driven by favorable equity markets.
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