8-KMaterial AgreementsFinancial EventsExhibits & Filings

METLIFE INC 8-K Report, Material Agreement (Dec 21, 2016)

Filed December 21, 2016For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife, Inc. (MET) has filed an 8-K report detailing a significant amendment to its $4 billion Five-Year Credit Agreement, originally established in May 2014. This second amendment, effective upon the completion of the Brighthouse Financial spin-off, will transform the existing credit facility into an Amended and Restated Credit Agreement. The amended agreement will provide for up to $3 billion in borrowings and letters of credit, with an option to increase this to $4 billion, subject to certain conditions and the absence of default events. The primary purpose of these funds is for general corporate needs, including supporting commercial paper and variable annuity policy requirements. This move is strategic as MetLife prepares for the separation of its Brighthouse Financial segment, ensuring continued access to liquidity and financial flexibility.

Key Highlights

  • 1MetLife amended its $4 billion Five-Year Credit Agreement, originally dated May 30, 2014.
  • 2The amendment will become effective upon the completion of the Brighthouse Financial spin-off transaction.
  • 3The credit facility will be amended and restated, providing for a total commitment of $3 billion, with an option to increase it to $4 billion.
  • 4Proceeds from the credit facility can be used for general corporate purposes, including backing commercial paper and supporting variable annuity policy and reinsurance reserve requirements.
  • 5The Amended and Restated Credit Agreement includes customary representations, warranties, and covenants.
  • 6A key covenant requires MetLife to maintain a consolidated net worth of the greater of $28.5 billion or 62% of consolidated net worth post-spin-off (excluding accumulated other comprehensive income).
  • 7The repayment date for borrowings under the new agreement is December 20, 2021, with letters of credit potentially remaining outstanding until December 20, 2022.

Frequently Asked Questions

This 8-K filing announces a material amendment to MetLife's existing credit agreement. The amendment is designed to restructure the credit facility to be effective after the planned spin-off of its Brighthouse Financial segment, ensuring continued access to liquidity for corporate purposes.

The original $4 billion credit agreement will be amended and restated. The new agreement will provide for a committed amount of $3 billion, with a provision to increase it up to $4 billion under certain conditions. This will be used for general corporate purposes and to support specific financial obligations.

A significant covenant requires MetLife to maintain a consolidated net worth. This is defined as the greater of $28.5 billion or 62% of its consolidated net worth as of the first quarter end following the spin-off, with accumulated other comprehensive income excluded from the calculation.

Borrowings under the Amended and Restated Credit Agreement must be repaid by December 20, 2021. However, letters of credit issued under the agreement may remain outstanding until December 20, 2022.