A.M. Best Assigns Ratings to MetLife's New Senior Notes; Ratings Placed Under Review.OLDWICK, N.J. -- A.M. Best Co. has assigned debt ratings of "a" to the senior unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. notes to be issued by MetLife, Inc. (MetLife) (NYSE NYSE See: New York Stock Exchange : MET) (New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY), and placed the ratings under review with negative implications. The company plans to issue approximately $2.7 billion in aggregate in three separate series: U.S. dollar-denominated fixed-rate notes in 10-year and 30-year tranches Tranches A piece, portion or slice of a deal or structured financing. This portion is one of several related securities that are offered at the same time but have different risks, rewards and/or maturities. "Tranche" is the French word for "slice". as well as a pound sterling-denominated offering. The existing debt ratings of MetLife, its issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) 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. These ratings were placed under review following MetLife's January 2005 announcement of its plan to acquire Travelers Life & Annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. (TL&A) from Citigroup for approximately $11.5 billion. The senior notes are the last of the series of securities offerings to be completed by MetLife in connection with funding the purchase price of TL&A. Following these offerings MetLife will have an estimated $6.6 billion of shelf capacity remaining. Additionally, A.M. Best expects MetLife to issue about $1 billion in commercial paper and pay $1 billion of the purchase price in common stock. Upon completion, MetLife's proforma financial leverage (excluding non-recourse debt Non-Recourse Debt A loan that is secured by some sort of collateral, usually property. The issuer can seize the collateral if the borrower defaults. Notes: These types of projects are characterized by high capital expenditures, long loan periods, and uncertain revenue ) will be 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 or early 2007. Additionally, A.M. Best believes that post-acquisition, MetLife's future earnings will provide strong debt service coverage of roughly seven times. For additional detail, see A.M. Best's MetLife press release of June 8 at http://www.ambest.com. For Best's Debt Ratings, all other Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit http://www.ambest.com/lh. 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. |
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