Fitch: Brighthouse preferreds BBB-

Fitch Ratings said it assigned an expected rating of BBB-(EXP) to Brighthouse Holdings, LLC's proposed issuance of roughly $50 million fixed-rate cumulative perpetual preferred securities.

The agency also assigned a long-term issuer default rating of BBB+, reflecting the legal transference of Brighthouse Life Insurance, New England Life Insurance Co. and Brighthouse Life Insurance of NY under Brighthouse Holdings.

Fitch previously had an expected rating of BBB+(EXP) on Brighthouse Holdings pending the transfer.

The expected rating has been set two notches down from Brighthouse Holdings’ issuer default rating to reflect a standard assumption of "poor" recoveries for preferred securities in a default, with no additional notching for non-performance risk. Fitch said it views non-performance risk as "minimal." The lack of any additional notching is due primarily to the immaterial amount of proposed preferred securities relative to debt securities outstanding at upstream holding company Brighthouse Financial, Inc., which Fitch believes makes risk of a coupon deferral highly unlikely.

Brighthouse Holdings will receive no proceeds from the issuance, as the securities are being sold by its current parent, MetLife Inc.

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