OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned a Long-Term Issue Credit Rating of “bbb” to the $700 million in shares of 5.625% non-cumulative preferred stock, Series E 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 represented by depositary shares will be utilized for general corporate purposes, including to fund the repurchase of existing debt. The Series E fixed rate preferred shares are perpetual, but the dividends are not cumulative or mandatory. The preferred shares are redeemable, in whole or in part, on or after June 15, 2023. The preferred shares also are redeemable, in whole but not in part, at any time prior to June 15, 2023, within 90 days after the occurrence of a rating agency event or regulatory capital event.
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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