Metlife Funding Agreement Backed Notes
–Senior Notes (FDIC guaranteed according to TLGP) to «AAA» in 2012; MetLife Short Term Funding LLC (MSTF) is a limited liability company established in the State of Delaware for the sole purpose of issuing non-recourse business documents, secured by financing agreements issued by MLIC, MICC and other related insurance companies. The repayment of the principal and the payment of the interest on the business document come from the cash flows of the financing agreements. MetLife Global Funding I (MGF) is a Delaware Statutory Trust established for the sole purpose of issuing non-recourse bonds secured to MGF by financing agreements of the Metropolitan Life Insurance Company (MLIC), a New York-based life insurance company. The repayment of the principal and the payment of the interest on the bonds come from the cash flows of the financing agreements. Under New York insurance law, financing agreements are equivalent to the rights of policyholders. MetLife`s strong accounting data reflects the strong risk-adjusted capitalization, favorable liquidity profile and good asset quality. Fitch notes that the legal capitalization of MetLife`s U.S. and Japanese insurance operations is considered strong and in line with rating expectations. At the end of 2011, the company`s U.S. life insurance subsidiaries (excluding ALICO) reported a combined capital and RBC ratio of $25.8 billion and 435% respectively. The company`s ALICO insurance business, which is MetLife`s largest insurance business outside the U.S., reported legal capital and a surplus of $3.3 billion, with the Japanese operation reporting a solvency margin of 880% at the end of 2011. MetLife`s profit and interest rate hedging rates have steadily improved over the past year, but remain slightly below the rating`s expectations.
Fitch expects ROE to improve in 2012 to the range of 11% to 12%, due to higher international earnings and moderate growth in the U.S. Fitch notes that the low-interest environment represents a significant headwind for MetLife and the industry, but acknowledges that the company has an extensive interest rate hedging program to mitigate the impact on earnings over the medium term. The ratings assigned to the funding programmes shall reflect the credit quality of the underlying financing agreements and shall include a review of the legal structure of the programmes concerned, the insurance rules in force and the related legal opinions. Based on this review, Fitch concluded that the legal structure allowed Fitch to «downgrade» the insurance companies that issue the financing agreements for the programs and bonds issued therein. Chicago–(BUSINESS WIRE)-Fitch Ratings has assigned the financing debt programs implemented by MetLife Inc. (MetLife) the following new ratings: –at principal interest rates at interest rates above maturity August 2013 to «A-«; -ordinary shares secured by debt securities with priority to «A»; Fitch assigns the following ratings with a stable outlook:. Fitch RatingsSenior ManagerDouglas L. Meyer, CFA, +1-312-368-2061Managent ManagerFitch, Inc.70 W. Madison StreetChicago, IL 60602or Secondary AnalystCynthia Crosson, +1-212-908-0863DirectorOrCommittee PresidentJames B. . . .