MetLife does not participate in the Treasury Capital

 

Wednesday, Apr 15,2009, 9:47:56 AM   Click:

WASHINGTON, 14 April 2009 (AM Best via COMTEX) - MET | Quote | Chart | News | PowerRating - MetLife Inc, the largest life insurer in the United States, will not participate in the U.S. Treasury Department's Capital Program purchase, saying it remains well capitalized and did not need the help of the Troubled Asset Relief Program.

The company held $ 5 billion of surplus capital and has already taken steps to strengthen its solid financial position, including raising capital in the market, MetLife (NYSE: MET | Quote | Chart | News | PowerRating) President C. Robert Henrikson said in a statement.

"We have repositioned our investment portfolio for over a year of the current, successfully completed $ 2.3 billion offering of shares last October, and successfully remarketed over $ 1 billion of debt Earlier this year, "said Henrikson. "We are confident that we have the financial strength to continue to succeed now and in the long term."

MetLife did not disclose whether it was one of dozens of life insurance companies are pending approval for capital injections under the CPP, which is limited to federal regulation, US-controlled banks, associations and savings banks and savings and loan holding companies. Treasury officials said the week of April 13 that the life insurers that meet the requirements due to their organization as banks or thrifts could be envisaged for the PRC, but the ministry has yet to confirm or denying published reports that a decision on these requests were imminent. No life insurance have been included among the institutions listed in the Treasury's TARP Transactions April 13 report.

Two of the seven insurers to publicly disclose their requests to participate PRC already withdrawn these offers. Protective Life Corp., which was approved by the Federal Reserve Board in January to become a bank holding company, together with the acquisition of Florida-based Bonifay Holding Co. Inc and its subsidiary Bank of Bonifay, withdrew its request earlier this month. Bonifay end of the operation, which was subject to approval by the Treasury to protect the investment in the PRC of March 31.

"Protective understands that the Treasury Department has not yet ruled on the pending requests, the insurer for participation in its procurement program in the capital and did not specify a timetable for such action," the company said in a statement. "Protective understands that, given this uncertainty, the Bank of Bonifay has determined that the expiry of the agreement was in their best interest."

Genworth Financial Inc., which applied in November, but not yet received approval from the Federal Office of Thrift Supervision to convert to a savings and loan holding company, disclosed late April 9 that he did not meeting, a period of cash, and therefore would not be eligible for the CPP. The company then abandoned its purchase of Maple Grove, Minnesota-based Interbank fsb (BestWire, April 10, 2009).

The OTS has already approved the purchase of savings and credit insurers and conversions Hartford Financial Services Group, Lincoln National Corp. and Phoenix Cos., made for the purpose of facilitating their application to the PRC. Others confirm request for participation include Principal Financial Group and Prudential Financial Group, both already the owners of savings institutions.

A previous application for financial services, the Dutch giant Aegon NV, which has called for a conversion by means of its Cedar Rapids, Iowa, a subsidiary Transamerica Life Insurance Co., later, was withdrawn in light of the rules limiting the participation of Treasury for domestic enterprises. Other major life insurers in the United States that have federally regulated banks or thrifts Allstate Corp., Ameriprise Financial and Nationwide Financial. None have confirmed their request to participate in the sheet.

Prudential, the second largest U.S. life insurer, also said it has extended its JennisonDryden and Target mutual funds and portfolio liquidity Prudential institutional participation in the Treasury Guarantee Program temporary funds Mutual money market. Created 19 September 2008, to strengthen the currency markets following the abnormally high rate of reimbursement, the program was recently extended by the Treasury of its scheduled expiry 30 April until 18 September 2009. Under the TGPMMF, the Treasury offers a guarantee triggered if a fund's net asset value falls below $ 0995, commonly known as "breaking the money."

MetLife, which operated as a federally chartered bank holding company since its launch of MetLife Bank NA, eight years ago, also revealed he was one of 19 financial institutions subject to examination stress test "by the Reserve Federal Treasury and the Capital Assistance Program. The tests were originally scheduled to be completed by the end of April, but Treasury Secretary Tim Geithner said recently that the process could be delayed while the Federal Reserve expressed concerns about the banks results public.

"Although a number of challenges remain, MetLife is well positioned to continue to meet the needs of our customers," said Henrikson.

Late last month, h Best said that all the MetLife financial strength rating and issuer credit ratings remained unchanged after its recently announced $ 397 million debt issue. The floating rate notes, due in 2012, are the duties of senior debt not guaranteed by the Federal Deposit Insurance Corp. as part of the FDIC's temporary guarantee program liquidity. MetLife has exhausted its capacity as a bank holding company under the program, whose cost has increased from 20 to 50 basis points, effective April 1. H Best said he would continue to follow the little increased financial leverage and reduced coverage of MetLife positions in response to this issue (BestWire, March 27, 2009).

Metropolitan Life Insurance Co. currently has a Best's financial strength rating of A + (Superior) with a stable outlook.

On the morning of April 14, shares of MetLife were trading at $ 28.07, down 2.5% from the prior close.

(By RJ Lehmann, director of the Washington office: raymond.lehmann @ ambest.com)