Yesterday, MetLife Global Funding I, a unit of MetLife Inc. (MET), announced a two-part sale of its notes worth $2.5 billion. The first part includes $1 billion of notes at an issue price of $100, maturing on July 13, 2011. These 18-month floating-rate notes will bear a rate of interest at 3-month Libor rate plus 40 basis points. Interest on the notes is payable quarterly in equal installments, commencing on April 13, 2010.
 
The second part includes $1.5 billion of notes at an issue price of $99.751, maturing on Jan 11, 2013.  These 3-year notes are projected to have a spread of 103 basis points over the US Treasuries, bearing a fixed interest rate of 2.5% and yield rate of 2.587%. Interest on the notes is payable semi-annually in equal installments, commencing on July 11, 2010.
 
Both the set of notes carry a rating of “AA”, “Aa3″ and “AA-” from Fitch, Moody’s Investor Service and Standards & Poor’s, respectively.
 
MetLife had appointed Barclays Plc ADR (BCS), Deutsche Bank AG (DB), Morgan Stanley (MS), and UBS AG (UBS) to be the joint book-running managers for the sale.
 
This is not the first instance when MetLife has engaged in note selling. Earlier, 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. Alongside, during this period, the company’s peer Prudential Financial Inc. (PRU) also sold $1.5 billion of its medium-term notes. Additionally, in November 2009, another peer, Aegon N.V. (AEG) announced debt issue of $500 million.
 
Although the details and usage of the note issue is 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 extend MetLife’s international profile and improve its ability to access the international debt capital markets to support the growth of its operations.
Read the full analyst report on “MET”
Read the full analyst report on “BCS”
Read the full analyst report on “DB”
Read the full analyst report on “MS”
Read the full analyst report on “UBS”
Read the full analyst report on “PRU”
Read the full analyst report on “AEG”
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