A.M. Best Assigns Indicative Ratings to MetLife's New Shelf Registration; Assigns Rating to Non-Cumulative Preferred Stock Offering.

OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "bbb+" to MetLife, Inc.'s (MetLife) (NYSE:MET) (New York, NY) newly issued floating rate non-cumulative preferred stock, Series A. Concurrently, A.M. Best has assigned indicative ratings of "a" to senior unsecured debt, "a-" to subordinated debt, "a-"to preferred securities and "bbb+" to preferred stock of MetLife's $11 billion shelf registration, which was recently filed with the Securities and Exchange Commission. An additional $3.9 billion of registered but unsold securities are being carried over from the company's prior registration statement. These debt ratings have been placed under review with negative implications.

The existing debt ratings of MetLife, its issuer credit rating (ICR) of "a" and the ICR of "aa" of MetLife's lead life insurance subsidiary, Metropolitan Life Insurance Company (New York, NY) all remain under review with negative implications. The ratings were placed under review following MetLife's January 2005 announcement of its plans to acquire Travelers Life & Annuity (TL&A) from Citigroup for approximately $11.5 billion.

The preferred stock offering is the first of several issuances to be accomplished by MetLife over the next several weeks. A.M. Best expects MetLife to issue between $7-8 billion in debt securities to fund the purchase of TL&A. These offerings will increase MetLife's proforma financial leverage (excluding non-recourse debt) to roughly 30%, incorporating some equity credit for certain securities per A.M. Best's hybrid methodology. The current ratings take into account A.M. Best's expectation that MetLife's debt-to-capital ratio will return to its historical range of approximately 25% by late 2006/early 2007. Additionally, A.M. Best believes that post-acquisition, MetLife's future earnings will provide strong debt service coverage and enable capitalization to remain fairly constant.

The Series A preferred shares are redeemable at MetLife's option after five years, and dividends will not accrue or be payable if not declared before the payment date related to that specific dividend period. However, unless the full dividends on all of the Series A preferreds have been declared and paid or provided for, MetLife cannot declare or pay dividends on its common stock. In addition, MetLife is prohibited from declaring dividends on the Series A preferred shares if it fails to meet specified risk-based capital, GAAP net income and shareholders' equity measures. Although these dividend restrictions are somewhat atypical for an insurance company preferred stock issue, A.M. Best has employed its standard notching of two down from the senior debt rating to reflect the security's relative structural subordination.

MetLife's ratings reflect the organization's diverse sources of revenue and earnings, its well-established brand name, the prominent market positions of its principal life insurance lines and prudent strategies related to investments and risk management. The addition of TL&A will augment MetLife's earnings power via increased scale, enhance its market positions in its core life and retirement savings businesses, expand distribution capabilities and broaden the scope and diversity of its international operations.

The ratings remain under review with negative implications reflecting A.M. Best's concerns regarding the substantial amount of goodwill and intangibles and the somewhat diminished level of tangible capital available to MetLife as a result of the TL&A acquisition. Additionally, in the near term, A.M. Best believes there is significant execution risk inherent in integrating the operations of the two organizations, which could impact the timing of the realization of expected cost savings given the breadth and complexity of the transition, especially in light of ongoing regulatory challenges to the proposed business plans related to expected headcount reductions. A.M. Best notes, however, that the projected cost saves are not purely headcount related, and that detailed integration plans are in place and are being actively managed. The ratings will remain under review pending a final analysis of MetLife's proforma capital structure and integration plans.

The following indicative shelf ratings have been assigned and placed under review with negative implications:

MetLife, Inc.--

--"a" on senior unsecured debt

--"a-" on subordinated debt

--"bbb+" on preferred stock

MetLife Capital Trust II and III--

--"a-" on preferred securities

The following rating has been assigned and placed under review with negative implications:

MetLife, Inc.--

--"bbb+" on floating rate non-cumulative preferred stock, Series A

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.