Yesterday, MetLife Inc.’s (MET) unit, MetLife Institutional Funding II, sold 3-year floating-rate notes worth approximately $1.0 billion in the 144A private placement market, according to Reuters.
These floating-rate notes were issued at a price of $100.00 and dated to mature on April 4, 2014. The non-callable notes are projected to have a coupon rate of 90 basis points over the existing 3-month LIBOR rate. Interest on the notes is payable quarterly, in equal installments, commencing July 5, 2011. The settlement is scheduled to be over on April 5, 2011.
The notes carry a rating of “Aa3” from Moody’s Investor Service of Moody’s Corp. (MCO) and “AA-” from both Fitch and Standards & Poor’s. Further, MetLife appointed Barclays plc (BCS) the sole book-running manager for the sale.
MetLife has been consistent in trading notes from time to time, depending on its operational uses. In January this year, MetLife Institutional Funding II had also vended 1.25-year notes worth approximately $500 million. During the same period, MetLife’s MetLife Global Funding I had also vended off senior notes worth approximately $1.5 billion. These notes generally have a duration of three to five years.
In 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.
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 supplement the company’s funding for its expansion and growth plan, although additional debt raises concern about 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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