S&P rates Brighthouse preferreds BBB-

S&P said it assigned its BBB- debt rating to Brighthouse Financial Inc.'s proposed issuance of fixed-rate noncumulative perpetual preferred shares, series B.

“The rating is two notches below our BBB+ long-term issuer credit and senior debt ratings on BHF. The two notches represent the subordination of the issue and the optional dividend deferability of the preferred shares,” S&P said in a press release.

The company intends to use the proceeds to partially further prepay a portion of its outstanding unsecured $1 billion term loan due 2024 and for general corporate purposes.

On May 15, Brighthouse sold $500 million of senior notes due 2030 and used the net proceeds to prepay a portion of the term loan.

“We will likely view these series B preferred shares as having intermediate equity content for the purpose of leverage and capital-adequacy calculations,” S&P said.

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