MetLife Trades $500M Notes - Analyst Blog

Last week, MetLife Inc.'s (MET) unit, MetLife Institutional Funding II, sold 1.25-year year floating-rate notes worth approximately $500 million in the 144A private placement market, according to Reuters.

These floating-rate notes were issued at a price of $100.00, maturing on July 12, 2012.  The non-callable notes are projected to have a coupon rate of 40 basis points over the existing 3-month LIBOR rate. Interest on the notes is payable quarterly, in equal instalments, commencing April 12, 2011. Besides, the settlement is scheduled to be on January 12, 2011.

The notes carry a rating of “Aa3” and “AA-” from Moody's Investor Service of Moody's Corp. (MCO) and Standards & Poor's, respectively.

Further, MetLife appointed Deutsche Bank AG (DB) and UBS AG (UBS) as the joint book-running managers for the sale.

Early last week, MetLife's MetLife Global Funding I had also vended off senior notes worth approximately $1.5 billion. These notes, however, have a duration ranging between three and five years.

Besides, during September 2010, a couple of subsidiaries of MetLife announced the sale of senior notes worth approximately $2 billion. While MetLife Global Funding I vended off its 5-year senior notes worth $850 million, MetLife Institutional Funding II retired $1.35 billion of its notes in a two-part sale, in the 144A private placement market.

Further, during September 2009, the company sold fixed-rate funding agreement-backed notes worth $1 billion, the proceeds of which were used for general corporate purposes.

Although the details and usage of the note issue are not disclosed, we believe it will help supplement the company's funding for its expansion and growth plan, although additional debt raises concern over the company's capital leverage. The notes issue will further enhance MetLife's international profile and improve its ability to access the international debt capital markets to support the growth of its operations.

 
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