Brighthouse Financial Prices Preferred Issue

Brighthouse Financial (NYSE:BHF) has priced their new issue of preferred with a coupon of 6.60%

The issue is non-cumulative, but dividends are qualified dividends for preferential tax treatment.

The issue will have an early redemption period starting 3/25/2024. On and after this date the issuer can call the shares for redemption at a price of $25 plus accrued dividends.

This issue has been rated low investment grade by Standard and Poors at a BBB- rating. Moodys has the rating at Ba2 and Fitch at BB+, both of which are non investment grade.

The new issue will trade under the permanent ticker of BHFAP. In the meantime the issue will begin trading on the OTC Grey market under the temporary ticker of BHFLL.

The pricing term sheet can be found here.

The preliminary prospectus can be found here.

BHF has a baby bond outstanding currently which carries a coupon of 6.25% which was issued last September and can be seen here.

9 thoughts on “Brighthouse Financial Prices Preferred Issue”

    1. Tim, I sold today. Pocketed over a $100 after taxes for a botched trade. Better to be lucky than good I guess. Holding an interest bearing issue in taxable account doesnt suite me at that yield. I doubt I buy the actual preferred.
      In taxable I bought a modest 400 shares of PPX today at $25.29 at market open.

  1. Hey Grid. Bought bhfll. I’m a little worried about lack of common divies for cushion. Anybody have thoughts on this?

    1. Tim, they are a “young company” (cast off from Met Life). I am under impression they wont have a dividend for a while still. Insurance finances are above my pay grade. But I understand they have to book a lot of losses in deriviatives and out of the money “market bets” as hedges for the service products they provide customers. So their investing at times shows a lot of losses. They made a buttload in 4th quarter because the market went bad which benefitted them with a big earnings quarter.
      I was planning on buying issue before I screwed up and bought the baby bond this morning not using my brain. I was only planning on testing issue out and maybe hold relative short time. That may not happen now. Since I bought baby bond in taxable I wont hold this long term either.

  2. After reading, I am not a huge fan of the issue…And this underwriting may not be getting off to a great start either… I just stuck my toe in for 325 shares this morning premarket trading and it hit instantly at $24.45.

    1. Added thought….Always pay attention to what you are doing….I wrote down the wrong ticker of SI I noticed…I did not not purchase the QDI. I accidently bought the baby bond… Ok, I get the Dumbo award today…Off to golf, so it looks like I own the BB until I have time to worry about it, lol

  3. That s a lot of yield for IG. If I can get it around par, I’m in. I have some of BHFAL too

    1. timdman–I haven’t looked at it, but some have opined that the issue is a little dicey–I guess if it was perfect the coupon would be 5.75%.

      1. I agree. Got a little excited. Think I will stay with the bond. I remember other companies spinning off parts and handing off more debt. More homework required. Guess in my mind I still think of them as METLIFE but they are not. My wife retired from teaching and part of her distribution went to Brighthouse so I think I was giving them the benefit of the doubt. Thanks for reining my enthusiasm

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