Moody’s: Brighthouse preferreds Baa3 (hyb)

Moody's Investors Service said it assigned a Baa3 (hyb) to roughly $50 million of perpetual fixed-rate cumulative preferred securities anticipated to be issued by Brighthouse Holdings, LLC to MetLife, Inc. (A3 stable).

MetLife will then offer to sell those securities and retain the proceeds.

This follows the recent pricing of $3 billion of senior unsecured debt from Brighthouse Financial, Inc. (Baa3 stable).

The outlook is stable.

Moody’s said the Baa3 (hyb) rating on the preferred securities is three notches lower than the A3 insurance financial strength ratings of Brighthouse Holdings’ operating companies, Brighthouse Life Insurance Co. and New England Life Insurance Co. Brighthouse Holdings, which will be owned by Brighthouse Financial, will function as an intermediate holding company that will directly own the insurance operating companies.

While the preferred securities issued by Brighthouse Holdings are "structurally" senior to debt issued by Brighthouse Financial, Brighthouse's ultimate future holding company, the amount of preferred securities outstanding at Brighthouse Holdings is modest relative to the senior debt at Brighthouse Financial.

Furthermore, the agency said it does not anticipate further debt or other security issuances from Brighthouse Holdings.

As a result, Moody’s said the Baa3 senior debt rating for Brighthouse Financial reflects the typical notching for an insurance holding company relative to its insurance operating subsidiaries and the agency has not differentiated the ratings between the senior debt at Brighthouse Financial and the preferred securities at Brighthouse Holdings.

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