Standard & Poor's Ratings Services assigned its 'A' senior debt rating to MetLife Inc.'s GBP 350 million senior unsecured note issuance, which is due in December 2024. The proceeds of the note will be used for general corporate purposes.

The rating reflects the group's very strong competitive position, strong diversified earnings sources, high-quality investment portfolio, very strong capitalization, and very strong financial flexibility. Partially offsetting these strengths are the challenges associated with improving the operating performance of the individual life insurance segment. Following depressed 2003 earnings within the individual operation, the company has made divisional management changes and is intent on improving operational efficiency, with a focus on further integrating distribution systems and increasing agent productivity.

Outlook

Following this debt issuance, financial leverage will increase modestly to 27%, which is supportive of the rating, and GAAP fixed-charge coverage is expected to be 8x-10x for full-year 2004. Through Sept. 30, 2004, GAAP pretax operating earnings (excluding accounting changes and nonrecurring items) increased to $2.75 billion compared with $2.10 billion for the same period in 2003. The improving performance reflects earnings growth across all product lines, driven by strong fee-based income and investment spreads. MetLife is expected to maintain its very strong competitive position in the institutional and individual life insurance segments, with new life sales (excluding corporate-owned and bank-owned life insurance sales) above industry averages. Capital adequacy will remain very strong.