Summary
MetLife Inc. (MET) announced on March 1, 2021, the amendment and restatement of its Five-Year Credit Agreement, originally dated August 4, 2017. This updated agreement, effective February 26, 2021, provides for aggregate borrowings and letter of credit issuances up to $3 billion, with an option to increase this facility to $4 billion, subject to certain conditions and the absence of any Event of Default. This renegotiated credit facility is a significant event for investors as it ensures continued access to substantial liquidity for MetLife's general corporate purposes. Notably, the funds can be used to support commercial paper, and letters of credit can be utilized for variable annuity policy and reinsurance reserve requirements, highlighting the facility's role in managing operational and regulatory needs. The agreement matures on February 26, 2026, with outstanding letters of credit having an extended maturity of February 26, 2027. The credit agreement includes customary covenants and representations, with a consolidated net worth requirement of $34 billion (excluding AOCI), demonstrating MetLife's commitment to maintaining strong financial standing.
Key Highlights
- 1MetLife Inc. amended and restated its $3 billion Five-Year Credit Agreement, effective February 26, 2021.
- 2The credit facility has the potential to be increased to a maximum of $4 billion.
- 3The agreement is designed to support general corporate purposes, including backing commercial paper.
- 4Letters of credit issued under the facility can be used to support variable annuity policy and reinsurance reserve requirements.
- 5The credit agreement matures on February 26, 2026, with a one-year extension for outstanding letters of credit.
- 6A key covenant requires MetLife to maintain a consolidated net worth of at least $34 billion (excluding accumulated other comprehensive income).