Today's rating actions follow
The affirmation of the remainder of MetLife's ratings reflects Fitch's view that the company's strong balance sheet fundamentals, excellent financial flexibility, and very strong market positions in several major insurance product lines and markets in the
KEY RATING DRIVERS
The downgrade of the entities that are expected to be separated reflects Fitch's view that the risk profile of Brighthouse Financial will be more exposed to capital market volatility and interest rate risk due to its business concentration in variable annuity and universal life with secondary guarantee businesses.
As core subsidiaries of MetLife,
Fitch's ratings on
Fitch will apply its Prism capital model separately to Brighthouse Financial when information becomes available, which is likely to be in 2017. A Prism capital score below strong could cause Fitch to reassess its view of Brighthouse Financial's capital strength, which is heavily supportive of the rating.
For MetLife and other subsidiaries:
Key rating drivers that could lead to an upgrade of MetLife's ratings include NAIC risk-based capital ratio above 450%, financial leverage below 25%, and GAAP fixed charge coverage ratio above 9x.
Key rating drivers that could lead to a downgrade of MetLife's ratings include NAIC risk-based capital ratio below 350%, financial leverage above 30%, run-rate ROE below 10%, and GAAP fixed charge coverage ratio below 5x.
FULL LIST OF RATING ACTIONS
Fitch has removed from Rating Watch Negative and downgraded the following ratings:
--Insurer Financial Strength (IFS) to 'A+' to 'AA-'.
The Rating Outlook is Stable.
Fitch affirms the following ratings:
--Long-term IDR at 'A';
--Short-term IDR at 'F1';
--1.756% senior notes due 2017 at 'A-';
--1.903% senior notes due 2017 'A-';
--6.817% senior notes due 2018 at 'A-';
--7.717% senior notes due 2019 at 'A-';
--5.25% sterling senior notes due 2020 at 'A-';
--4.75% senior notes due 2021 at 'A-';
--3.048% senior notes due 2022 at 'A-';
--4.368% senior notes due 2023 'A-';
--5.375% senior notes due 2024 at 'A-';
--3.6% senior notes due 2024 at 'A-';
--3% senior notes due 2025 at 'A-';
--3.6% senior notes due 2025 at 'A-';
--6.5% senior notes due 2032 at 'A-';
--6.375% senior notes due 2034 at 'A-';
--5.7% senior notes due 2035 at 'A-';
--5.875% senior notes due 2041 at 'A-';
--4.125% senior notes due 2042 at 'A-';
--4.875% senior notes due 2043 at 'A-';
--4.05% senior notes due 2045 at 'A-';
--4.6% senior notes due 2046 at 'A-';
--6.4% junior subordinated debentures due
--10.75% junior subordinated debentures due
--4.721% senior notes due 2044 at 'A-';
--Floating-rate non-cumulative preferred stock, series A at 'BBB';
--5.25% fixed-to-floating rate non-cumulative preferred stock, series C at 'BBB';
--Commercial paper at 'F1'.
--IFS at 'AA-';
--Long-term IDR at 'A+';
--Surplus notes at 'A';
--Short-term IDR at 'F1+'.
--Insurer Financial Strength (IFS) 'AA-'.
--Commercial paper at 'F1+'.
MetLife Capital Trust IV
--7.875% trust securities at 'BBB'.
--9.25% trust securities at 'BBB'.
Metropolitan Life Global Funding I
--Medium-term note program at 'AA-'.
--Commercial paper program at 'F1+'.
The Rating Outlook is Stable.
Additional information is available on www.fitchratings.com
Insurance Rating Methodology (pub.
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James B. Auden, CFA
Source: Fitch Ratings