Brighthouse Financial now has no debt maturities scheduled until 2024

By Devika Patel

Knoxville, Tenn., Feb. 12 – Brighthouse Financial, Inc. replaced its $600 million term loan facility due 2019 with a new $1 billion term loan facility due 2024, giving the company $1.1 billion of liquid assets at the holding company and no debt maturities until 2024.

“On Feb. 1, we refinanced our $600 million term loan facility, which was scheduled to mature in December 2019, with a new $1 billion term loan facility that matures in February of 2024,” executive vice president and chief financial officer Anant Bhalla said on the company’s fourth quarter and year ended Dec. 31, 2018 earnings conference call on Tuesday.

“This results in liquid assets at the holding company that are currently in excess of $1.1 billion.

“Additionally, we have no debt maturities until 2024.

“Given the strength of our balance sheet and our excess liquid assets at the holding company, we believe Brighthouse is well-positioned to successfully navigate through market volatility and across market cycles,” he said.

Cash and cash equivalents were $4,145,000,000 as of Dec. 31, 2018, compared to $1,857,000,000 as of Dec. 31, 2017.

Brighthouse entered into a new term loan agreement on Feb. 1 for a new $1 billion unsecured term loan facility with JPMorgan Chase Bank, NA as administrative agent.

JPMorgan Chase Bank, Bank of America Merrill, Lynch, BNP Paribas, HSBC Bank USA, NA, Morgan Stanley MUFG Loan Partners, LLC and U.S. Bank NA are joint lead arrangers, joint bookrunners and syndication agents.

The term loan facility replaces the company’s former $600 million term loan facility dated July 21, 2017 that was set to expire on Dec. 2, 2019. The new facility is on substantially the same terms as the prior facility, including pricing, except it provides for an increase in outstanding loans to $1 billion and will mature on Feb. 1, 2024.

In addition, subject to having borrowing capacity following one or more repayments, obtaining commitments from lenders and satisfying other conditions, the company may increase the new term loan up to four times during its term, provided that following any increase the outstanding balance does not exceed $1 billion.

The company must repay the aggregate principal amount of the new term loan in quarterly principal installments, beginning March 31, 2021, equal to 2.5% of the sum of (a) the outstanding principal balance on the business day prior to March 31, 2021 and (b) the amount of any increase in the facility occurring on or after March 31, 2021.

Loans bear interest at Libor plus an applicable margin ranging from 112.5 basis points to 212.5 bps depending on the rating of the company’s index debt. The applicable margin is initially 150 bps.

The loan agreement requires the company to maintain a minimum adjusted consolidated net worth and to not permit the ratio of consolidated total debt to consolidated total capitalization to exceed 0.35 to 1.00.

The company used the borrowings under the new term loan to prepay in full all loans outstanding under the prior facility, with the remainder to be used for general corporate purposes.

The prior 2017 term loan was terminated at close of the new facility.

Brighthouse is a Charlotte, N.C.-based life insurance provider.

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