Brighthouse Financial to Sell Preferred Issue

Insurer Brighthouse Financial (NYSE:BHF) is selling a new non cumulative preferred stock issue.

BHF was formerly part of Met Life which was spun off in August 2017. The company has $206 billion in assets.

The issue will have typical terms for an insurer-non-cumulative, but qualified for preferential tax treatment.

There will be an early redemption period starting in 2024.

At this point in time no rating has been issued, but Moodys has a shelf registration for preferreds from 9/2018 at a Ba2–not investment grade.

Preliminary details of the issue are here.

11 thoughts on “Brighthouse Financial to Sell Preferred Issue”

    1. Arod,

      Thank you! And sorry.
      My broker sent me this information. Not only was the coupon incorrect, but it’s lower rated by Moody’s -Ba2.

      Leslie

      1. Leslie, its not unusual for different rating agencies to vary a notch. Pretty standard, sometimes the vary two notches. This issue piques my interest at the surface level. But the yield seems a bit generous for the rating. The baby bond hasnt been gangbusters either. Sometimes insurance issuances arent the most coveted of possessions though. I will need to chew on this one tonight.

      2. Hi Leslie, no problem; no apologies needed. In fact, I am the one that needs to apologize: I started my comment earlier than your post, but while multiplexing did not finish my comment as I had to attend to other matters. I failed to look at the comments prior to posting so I was unaware of your post.
        My apologies as I now realize that my post appears as correcting your post, being rude. I make many mistakes each day, including this one.
        BTW, this in a way goes to show the importance that each individual needs to their DD.

  1. Issuer: Brighthouse Financial
    Rating: BA1, BBB-

    Coupon: 6.50%
    Perpetual Maturity
    Callable after Five Years
    This is Tax Advantaged QDI Income

  2. too much paper coming in the market. Glut next and good opportunity to buy lower.

    1. I too spotted fresh S&P rating, dated today (18 March 2019): BBB-
      I checked Moody’s and it is as Tim expressed. They may have not paid M this time for assessment.

      1. Tim, I am an elderly novice trying to find qualified income or companies that consider dividends as return of capital for income tax purposes. Do I understand this correctly: The current BHFAL (BBB- rated) is a senior note(baby bond?) so it is not qualified distribution. But the new issue will be a preferred issue and therefore qualified.

        1. Hi raydaboz—yes the new issue will be qualified because it is a dividend and the baby bond pays interest which is always taxed as ordinary income.

          Banks and insurance companies almost always pay qualified dividends on their preferreds.

    2. Must be a really fresh one will check it out and when they price it mention it.

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