Brighthouse again ups tender caps; offers oversubscribed at early date

By Taylor Fox

New York, Nov. 25 – Brighthouse Financial, Inc. increased the tender caps under its cash tender offers for its outstanding $1.5 billion 3.7% senior notes due 2027 (Cusip: 10922NAC7, 10922NAA1) and $1.5 billion 4.7% senior notes due 2047 (Cusip: 10922NAF0, 10922NAD5, U6225NAB8), according to a press release.

The tender cap for the 2027 notes was increased to $199,716,000 from $175 million, and the tender cap for the 2047 notes was increased to $350 million from $325 million. Each of the tender caps was previously increased from $100 million.

As of the 5 p.m. ET Nov. 24 early tender deadline, $456,065,000 of the 2027 notes and $603,146,000 of the 2047 notes were tendered.

Brighthouse will accept for purchase $199,716,000 of the tendered 2027 notes using a proration factor of 44% and $350 million of the tendered 2047 notes at a proration factor of 58.1%.

The offers will expire at 11:59 p.m. ET Dec. 9. However, because the tender caps have been reached as of the early tender deadline, no notes tendered after the early deadline will be accepted for purchase.

The financing condition for the offers was satisfied on Nov. 20 upon the company’s issuance of 23 million depositary shares, each representing a 1/1,000th interest in a share of its 5.375% non-cumulative preferred stock, series C, for proceeds of $575 million.

As reported, each offer is conditioned on the company receiving prior to the expiration time proceeds of at least $500 million from an offering of one or more series of depositary shares, previously increased from $200 million.

Holders who tendered notes prior to the early tender deadline will be eligible to receive the total consideration, which includes a $50 early tender premium per $1,000 of notes.

The total consideration will be determined using a fixed spread plus the yield based on the bid side price of the applicable U.S. Treasury security calculated at 10 a.m. ET Nov. 25.

Pricing for the 2027 notes will be based on the 0.625% U.S. Treasury due Aug. 15, 2030 and a fixed spread of 130 basis points, and pricing for the 2047 notes will be based on the 1.25% U.S. Treasury due May 15, 2050 and a fixed spread 275 bps.

The company will also pay accrued interest to but excluding the applicable settlement date.

The early settlement date is expected to be Nov. 27. The final settlement date is set for Dec. 11.

The purpose of the offers is to refinance the notes of each series.

Goldman Sachs & Co. LLC (212 357-1452, 800 828-3182) and Morgan Stanley & Co. LLC (800 624-1808, 212 761-1057) are lead dealer managers, and Siebert Williams Shank is the co-dealer manager.

D.F. King & Co., Inc (212 269-5550, 800 848-3401; bhf@dfking.com) is the information agent and tender agent.

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

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