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26 Oct 2007
Moody's assigns Prime-1 rating to Metlife's Beagle Funding LLC
Newly Established, Fully Supported $10 Billion CP Program
New York, October 26, 2007 -- Moody's has assigned a Prime-1 rating to the funding agreement-backed
U.S. commercial paper notes ("CP"), Euro commercial
paper notes ("ECP"), and extendable notes ("EN")
issued by Beagle Funding LLC ("Beagle"). Beagle is a newly established,
fully supported, single-seller commercial paper program administered
by Lord Securities Corporation and sponsored by Metropolitan Life Insurance
Company ("MLIC," Aa2/Prime-1 ISF), a wholly owned subsidiary
of MetLife, Inc. (rated A2/Prime-1). Beagle's
program limit is $10 billion; however, Moody's expects
that issuance will not exceed $4 billion at this time.
The CP and ECP to be issued by Beagle will have maturity dates up to 360
days, while the EN will have expected maturity dates up to 270 days,
and final maturity dates up to 360 days, from initial issuance.
Beagle has the ability to issue ECP in U.S. Dollars,
Euros, Pounds Sterling, or other approved currencies.
Beagle will use the proceeds from the issuance of its program notes to
make deposits under a master funding agreement issued by MLIC.
Beagle may enter into additional funding agreements issued by other insurance
companies designated by MLIC, subject to prior notice to Moody's
and certain other conditions. The funding agreement is the sole
asset backing Beagle's program notes and is essentially an investment
contract guaranteed by MLIC. MLIC has an insurance financial strength
rating of Aa2 and short-term debt rating of Prime-1,
and is a wholly owned subsidiary of MetLife, Inc.,
a New York-based leading provider of life insurance, annuities,
and other investment products.
MLIC will use the proceeds deposited under the funding agreement to invest
in a variety of securities as part of its general account. The
payment obligation of MLIC under the funding agreement is pari passu with
claims under insurance policies and annuities, and senior to the
company's other debt obligations.
RATING FULLY SUPPORTED BY FUNDING AGREEMENT
The Prime-1 rating assigned to Beagle's program notes is
based on, among other factors, the following: (i) the
full credit and liquidity support provided by the funding agreement,
which is an obligation of Aa2-rated MLIC; (ii) the capability
and experience of Lord Securities Corporation in its role as the administrative
agent; and (iii) structural protections incorporated into the program
to make it bankruptcy-remote.
Beagle's program notes are fully supported. Under the funding
agreement, MLIC agrees to pay interest on the amounts deposited
by Beagle, and ultimately, to repay the principal amounts
of such deposits on the maturity dates of the corresponding program notes.
The funding agreement provides for payments that are sufficient to make
full and timely payments to holders of program notes. Beagle intends
to manage its ABCP issuance so that no more than $250 million of
commercial paper matures on any day, and no more than $1.25
billion mature on any seven day period.
Beagle's funding agreement does not have a pre-determined termination
date. The funding agreement is structured to pay on any date that
interest and principal payments are due on Beagle's program notes.
Beagle's ENs are not required to be repaid on their expected maturity
dates. If Beagle lacks sufficient funds to repay ENs on their expected
maturity dates, the ENs may be extended and repaid on their final
maturity dates. The funding agreement will ensure sufficient funds
to repay ENs on their final maturity dates.
BEAGLE RATING IS HIGHLY CORRELATED TO MLIC'S RATING
The Prime-1 rating of Beagle's CP, ECP, and EN
is highly correlated with the rating of MLIC, in that a downgrade
of the insurance company may result in a downgrade of Beagle's program
notes. In evaluating Beagle, Moody's reviewed not only the
terms of the funding agreement, but also the credit strength of
MLIC. The fundamental rating of MLIC is monitored by Moody's and
is dependent on the overall asset/liability balance of the company,
and the strength of its underlying insurance business. In Moody's
opinion, the amount of program notes that Beagle is authorized to
issue and the commitment it potentially represents are compatible with
the Aa2 and Prime-1 rating of MLIC.
PARTIES TO THE TRANSACTION:
Lord Securities Corporation will act as the administrative agent for Beagle.
MLIC will perform certain services for the administrative agent in its
role as sub-agent. Citibank, N.A. (Aaa/Prime-1/A)
will serve as the security trustee, US depositary and ECP issuing
and paying agent. Morgan Stanley & Co. Incorporated,
Merrill Lynch Money Markets Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Goldman Sachs & Co.,
and Goldman Sachs International will act as the dealers/placement agents.
MLIC is a wholly owned subsidiary of MetLife, Inc.,
which has a senior unsecured debt rating of A2 and a short-term
debt rating of Prime-1. MetLife, Inc. is a
leading provider of insurance and financial services with operations throughout
the U.S. and the Latin America, Europe and Asia Pacific
regions. MetLife, Inc. is headquartered in New York,
and has reported total assets of about $528 billion and shareholders'
equity of approximately $33.8 billion as of December 31,
For a more detailed description of Beagle Funding LLC, please see
our program review on www.moodys.com.
Structured Finance Group
Moody's Investors Service
Senior Vice President
Structured Finance Group
Moody's Investors Service
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
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