8-KMaterial AgreementsShareholder MattersOther Events+1

METLIFE INC 8-K Report, Material Agreement (Jun 1, 2015)

Filed June 1, 2015For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife, Inc. (MET) filed an 8-K on June 1, 2015, detailing a significant capital management transaction. The company completed a public offering of 1,500,000 shares of its 5.250% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C. This offering was accompanied by a Replacement Capital Covenant, which restricts MetLife and its subsidiaries from repaying, redeeming, or purchasing these Series C Preferred Shares before December 31, 2018, unless funded by specific replacement capital securities. Additionally, on the same date, MetLife announced a tender offer to purchase all outstanding 6.500% Non-Cumulative Preferred Stock, Series B. For any Series B Preferred Shares not tendered, the company will proceed with their redemption. These actions indicate MetLife's strategic efforts to manage its capital structure and potentially optimize its preferred stock offerings.

Key Highlights

  • 1Completion of a public offering for 1,500,000 shares of 5.250% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C.
  • 2Entry into a Replacement Capital Covenant, effective June 1, 2015, restricting redemption/repurchase of Series C Preferred Shares until December 31, 2018, unless from replacement capital.
  • 3The Replacement Capital Covenant is intended to benefit holders of certain long-term indebtedness, initially the 10.750% Fixed-to-Floating Rate Junior Subordinated Debentures due 2069.
  • 4Commencement of a tender offer to purchase all outstanding 6.500% Non-Cumulative Preferred Stock, Series B.
  • 5Announcement of redemption for any Series B Preferred Shares not purchased in the tender offer.
  • 6Filing of legal opinion from Willkie Farr & Gallagher LLP regarding the validity of the Series C Preferred Shares.
  • 7News release dated June 1, 2015, announcing the tender offer and redemption of Series B Preferred Shares.

Frequently Asked Questions

This 8-K filing primarily announces the completion of a public offering of MetLife's Series C Preferred Stock and the establishment of a related Replacement Capital Covenant. It also discloses the commencement of a tender offer and redemption plan for its Series B Preferred Stock.

The Replacement Capital Covenant restricts MetLife and its subsidiaries from repaying, redeeming, or purchasing the Series C Preferred Shares before December 31, 2018. This restriction is waived only if the action is funded by the proceeds from the issuance of specified 'replacement capital securities'.

MetLife is initiating a tender offer to buy back all of its outstanding Series B Preferred Shares for cash. Any shares not successfully tendered in the offer will be redeemed by the company.

For investors in the Series C Preferred Shares, the offering establishes a new class of preferred equity. The Replacement Capital Covenant provides some protection to holders of MetLife's long-term debt (initially the 2069 Junior Subordinated Debentures) by ensuring that the Series C Preferred Stock is not redeemed prematurely using funds that could otherwise be used to service that debt, unless specific replacement capital conditions are met.