MetLife Prices Preferred-Update

Insurer MetLife (NYSE:MET) has priced their new fixed rate preferred issue at 5.625%.  It is a huge issue with 28,000,000 shares being sold with another 4,200,000 being available for overallotment.

The issue in non-cumulative (as are most all insurance and bank issues), and has the normal terms of a optional 5 year redemption period beginning in 2023.  Dividends are quarterly of course.

The issue is investment grade and we believe that this is a good issue for those looking for quality with less regard for movement in share price which may go lower if interest rates move higher.

For comparison Allstate sold a non-cumulative 5.625 preferred in March (NYSE:ALL:G) which is now trading around $25.36 (about $25.10 stripped).

Final pricing documents can be found here.

UPDATE–issue will trade under the OTC Grey Market ticker MTLLP

4 thoughts on “MetLife Prices Preferred-Update”

  1. Gridbird
    What is “slotted” mean as referrenced above and what does it imply with the Pfd stock ? TIA

    1. It just means different rating agencies depending on their specific criteria automatically lower the rating of a preferred usually one to three notches below the lowest subordinate debt the company has issued, no matter the strength or weakness financially of the company. The ratings are all based on levels of “capital stack” a company has. For example bank secured debt usually holds the top spot (if the company has any) then senior secured, senior unsecured, etc, etc. I am not nearly as proficient at balance sheet reading or the detailed info as the agencies, so I rely on them for synopsis of company health.
      For me usually, I follow the bonds and dont worry about a preferred rating or if its unrated. For example, I have an unrated perpetual preferred. But its bonds are “A” rated, the small utility generates over $20 million in regulated profits. The total amount of preferred dividends the company is responsible for is $3,500 yearly. I dont need a rating agency for this preferred as the coverage ratio is over 5 million, lol…
      But there is always the exception…Pacific Gas and Electric still has investment grade bonds but its subsidiary preferreds have been suspended.

  2. Kind of sad that our top US financial companies are barely investment grade rated. I would imagine demand will be strong from pension funds especially and probably pfd CEFs etc.

    1. Bea, keep in mind this is just a lowly holding company preferred and they are also slotted. MET has senior unsecured debentures that have A ratings by Moodys and S&P. That being said, no I am not interested either.

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