Brighthouse Financial Announces Cash Tender Offers for 3.700% and 4.700% Senior Notes
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Brighthouse Financial, Charlotte, NC 28277.

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  • Nov 10, 2020

Brighthouse Financial Announces Cash Tender Offers for 3.700% and 4.700% Senior Notes

CHARLOTTE, NC,  November 10, 2020

Brighthouse Financial, Inc. (the “Company” or “Brighthouse Financial”) (Nasdaq: BHF) announced today the commencement of cash tender offers (each, an “Offer”, and collectively, the “Offers”) for (i) up to an aggregate principal amount of $100,000,000 (the “2027 Notes Tender Cap”) of its 3.700% Senior Notes due 2027 (the “2027 Notes”) and (ii) up to an aggregate principal amount of $100,000,000 (the “2047 Notes Tender Cap” and, together with the 2027 Notes Tender Cap, the “Tender Caps”) of its 4.700% Senior Notes due 2047 (the “2047 Notes” and, together with the 2027 Notes, the “Notes,” and each a “series” of Notes) from each registered holder of the Notes (individually, a “Holder” or “you,” and collectively, the “Holders”). The Offers are being made pursuant to and are subject to the terms and conditions, including a financing condition, set forth in the Offer to Purchase for Cash, dated November 10, 2020 (the “Offer to Purchase”) and the related Letter of Transmittal, dated November 10, 2020 (the “Letter of Transmittal” and, together with the Offer to Purchase, the “Tender Offer Documents”). Capitalized terms used but not defined in this press release have the meanings given to them in the Offer to Purchase.
 

Title of Security CUSIP Number Principal Amount Outstanding Tender Cap(1) U.S. Treasury Security Bloomberg Reference Page(2) Spread (basis points) Early Tender Premium(3) Hypothetical Total Consideration(4)
3.700% Senior Notes due 2027 10922NAC7 10922NAA1 $1,500,000,000 $100,000,000 0.625% UST due 8/15/2030 PX1 130 $50.00 $1,085.78
4.700% Senior Notes due 2047 10922NAF0 10922NAD5 U6225NAB8 $1,500,000,000 $100,000,000 1.25% UST due 5/15/2050 PX1 275 $50.00 $1,033.29

(1) The Tender Cap for each series will be based on the aggregate principal amount with respect to such series.

(2) The applicable page on Bloomberg from which the Lead Dealer Managers will quote the bid side prices of the applicable U.S. Treasury Security. In the above table, “UST” denotes a U.S. Treasury Security.

(3) Per $1,000 principal amount of Notes validly tendered and not validly withdrawn and accepted for purchase in the applicable Offer at or prior to the Early Tender Deadline.

(4) The Total Consideration for each series of Notes, which will be determined as set forth in the Offer to Purchase, will be inclusive of the Early Tender Premium but exclusive of Accrued Interest and will be based on the fixed spread specified above plus the Reference Yield of the Reference U.S. Treasury Security, to be determined by the Dealer Managers based on certain quotes available at 10:00 a.m., New York City time, on the Tender Offer Price Determination Date, which is expected to be November 25, 2020. The hypothetical Total Consideration per $1,000 principal amount of each series of Notes validly tendered and not validly withdrawn and accepted for purchase in the applicable Offer, is based on a hypothetical Reference Yield determined as of 10:00 a.m., New York City time, on November 9, 2020, assuming an Early Settlement Date of November 27, 2020 for each series of Notes, and excludes Accrued Interest. The actual Reference Yield used to determine the actual Total Consideration for each series of Notes will be calculated on the Tender Offer Price Determination Date. This information is provided for illustrative purposes only. The Company makes no representation with respect to the actual Total Consideration that may be paid with respect to each series of Notes and such amounts may be greater or less than those shown depending on the Reference Yield as of the Tender Offer Price Determination Date.

All documentation relating to the Offers, including the Offer to Purchase and the Letter of Transmittal, together with any updates, are available from the Information Agent and the Tender Agent, as set forth below. The Tender Offer Documents set forth a complete description of the terms and conditions of the Offers. Holders are urged to read the Tender Offer Documents carefully before making any decision with respect to the Offers.

Purpose of the Offers

The purpose of the Offers, together with the related financing consisting of the contemporaneous offering of one or more series of depositary shares representing interests in one or more new series of our non-cumulative preferred stock, is to refinance the Notes of each series that are validly tendered and accepted for purchase in the Offers.

Details of the Offers

Each Offer will expire at 11:59 p.m., New York City time, on December 9, 2020, or any other date and time to which the Company extends such Offer (such date and time, as the same may be extended with respect to each series of Notes, the “Expiration Time”), unless earlier terminated. You must validly tender your Notes at or prior to 5:00 p.m., New York City time, on November 24, 2020 (such date and time, as the same may be extended with respect to each series of Notes, the “Early Tender Deadline”) to be eligible to receive the Total Consideration, which includes the applicable Early Tender Premium for each series of Notes set forth in the table above. If you tender your Notes after the Early Tender Deadline, but at or prior to the Expiration Time, with respect to any Notes accepted for purchase you will only be eligible to receive the Tender Offer Consideration, which is an amount equal to the Total Consideration minus the Early Tender Premium. If the Company extends the Expiration Time, Early Tender Deadline, Tender Offer Price Determination Date or the Withdrawal Deadline with respect to either Offer, it may or may not extend it with respect to the other Offer in its sole discretion.

Notes may be withdrawn at or prior to, but not after, 5:00 p.m., New York City time, on November 24, 2020 (such date and time, as the same may be extended with respect to each series of Notes, the “Withdrawal Deadline”).

The “Total Consideration” per $1,000 principal amount of Notes of each series validly tendered and accepted for purchase pursuant to the Offers will be determined by reference to the fixed spread specified for the applicable series of Notes plus the yield based on the bid side price of the applicable U.S. Treasury Security specified in the table above for each series of Notes, as described in the Offer to Purchase, as calculated by Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC (together, the “Lead Dealer Managers”) at 10:00 a.m., New York City time, on November 25, 2020 (subject to certain exceptions, such time and date, as the same may be extended with respect to each series of Notes, the “Tender Offer Price Determination Date”). In addition to the Tender Offer Consideration or Total Consideration, as applicable, all Holders of Notes accepted for purchase will also receive accrued and unpaid interest rounded to the nearest cent from the last applicable interest payment date up to, but not including, the applicable Settlement Date (with respect to each series of Notes, the “Accrued Interest”).

If an Offer is not fully subscribed as of the Early Tender Deadline, subject to the applicable Tender Cap, Notes of the applicable series validly tendered and not validly withdrawn at or prior to the Early Tender Deadline will be accepted for purchase in priority to Notes of such series validly tendered after such Early Tender Deadline. If an Offer is fully subscribed as of the Early Tender Deadline, no Notes of the applicable series tendered after the Early Tender Deadline will be accepted for purchase. Subject to applicable law, the Company may increase or decrease the Tender Cap with respect to an Offer without extending the Early Tender Deadline or Withdrawal Deadline for such Offer.

Notes of a series may be subject to proration (rounded down to the nearest $1,000 and to avoid the purchase of Notes in a principal amount other than $2,000 or in an integral multiple of $1,000 in excess thereof) if the aggregate principal amount of the Notes of such series validly tendered and not validly withdrawn is greater than the applicable Tender Cap.

Payment for Notes that are validly tendered and not validly withdrawn at or prior to the Early Tender Deadline and accepted for purchase will be made promptly following such Early Tender Deadline on the Early Settlement Date. The Company anticipates that the Early Settlement Date for the Offers will be November 27, 2020. Payment for Notes that are validly tendered after the Early Tender Deadline but at or prior to the Expiration Time and accepted for purchase will be made promptly following such Expiration Time on the Final Settlement Date. If any notes validly tendered after the Early Tender Deadline are accepted for purchase, the Company anticipates that the Final Settlement Date for the Offers will be December 11, 2020. No tenders will be valid if submitted after the Expiration Time.

If you validly tender your Notes at or prior to the Withdrawal Deadline, you may validly withdraw those tendered Notes at any time at or prior to the Withdrawal Deadline, but not thereafter, except in certain limited circumstances where additional withdrawal rights are required by law (as determined by the Company in its sole discretion). In the event of termination of an Offer, Notes of the applicable series tendered pursuant to such Offer will be promptly returned. Notes tendered pursuant to an Offer and not purchased due to proration or a defect in the tender will be returned to the tendering Holders promptly following the Expiration Time.

Each Offer is subject to the satisfaction or waiver of the conditions, including, without limitation, the receipt by the Company prior to the Expiration Time of gross proceeds of at least $200,000,000 from the Company’s contemporaneous offering of one or more series of depositary shares, upon the terms and subject to the conditions contained in the prospectus related to such offering (the “Financing Condition”). The Company shall have no obligation to purchase any Notes validly tendered by the Early Tender Deadline or the Expiration Time unless the Financing Condition has been satisfied as of the Early Settlement Date. The Company reserves the absolute right, subject to applicable law, to: (i) waive any and all conditions to an Offer, including, without limitation, the Financing Condition; (ii) extend or terminate an Offer; (iii) increase, decrease or eliminate the Tender Cap for an Offer without extending the Early Tender Deadline or Withdrawal Deadline; or (iv) otherwise amend an Offer in any respect. Neither of the Offers is conditioned upon consummation of the other Offer nor on any minimum amount of Notes being tendered.

Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are acting as lead dealer managers and Siebert Williams Shank is acting as a co-dealer manager for the Offers. Questions regarding terms and conditions of the Offers should be directed to Goldman Sachs & Co. LLC by calling toll free at (212) 357-1452 or collect at (800) 828-3182 or Morgan Stanley & Co. LLC by calling toll free at 800-624-1808 or collect at 212-761-1057.

D.F. King & Co., Inc. has been appointed as information agent (the “Information Agent”) and tender agent (the “Tender Agent”) in connection with the Offers. Questions or requests for assistance in connection with the Offers or the delivery of tender instructions, or for additional copies of the Tender Offer Documents, may be directed to D.F. King & Co., Inc. by calling collect at (212) 269-5550 (for banks and brokers) or toll free at (800) 848-3402 (for all others) or by email at bhf@dfking.com. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offers.

None of the Company, the Company's Board of Directors, the Dealer Managers, the Information Agent, the trustee under the indenture governing the Notes or any of their respective affiliates is making any recommendation as to whether Holders should tender any Notes in response to an Offer. Holders must make their own decision as to whether to tender any of their Notes and, if so, the principal amounts of Notes to tender.

This press release shall not constitute an offer to sell, a solicitation to buy, or an offer to purchase or sell any securities. The Offers are being made only pursuant to the Offer to Purchase and only in such jurisdictions as is permitted under applicable law.

Forward-Looking Statements

This news release and other oral or written statements that we make from time to time may contain information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve substantial risks and uncertainties. We have tried, wherever possible, to identify such statements using words such as "anticipate," "estimate," "expect," "may," "will," "could," "intend," "believe" and other words and terms of similar meaning.

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining the actual future results of Brighthouse Financial. These statements are based on current expectations and the current economic environment and involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others: the impact of the ongoing COVID-19 pandemic; differences between actual experience and actuarial assumptions and the effectiveness of our actuarial models; higher risk management costs and exposure to increased market risk due to guarantees within certain of our products; the effectiveness of our variable annuity exposure risk management strategy and the impact of such strategy on volatility in our profitability measures and negative effects on our statutory capital; the reserves we are required to hold against our variable annuities as a result of actuarial guidelines; the potential material adverse effect of changes in accounting standards, practices and/or policies applicable to us, including changes in the accounting for long-duration contracts; our degree of leverage due to indebtedness; the impact of adverse capital and credit market conditions, including with respect to our ability to meet liquidity needs and access capital; the impact of changes in regulation and in supervisory and enforcement policies on our insurance business or other operations; the availability of reinsurance and the ability of the counterparties to our reinsurance or indemnification arrangements to perform their obligations thereunder; the adverse impact to liabilities for policyholder claims as a result of extreme mortality events; heightened competition, including with respect to service, product features, scale, price, actual or perceived financial strength, claims-paying ratings, credit ratings, e-business capabilities and name recognition; any failure of third parties to provide services we need, any failure of the practices and procedures of such third parties and any inability to obtain information or assistance we need from third parties; the ability of our insurance subsidiaries to pay dividends to us, and our ability to pay dividends to our shareholders and repurchase our common stock; the effectiveness of our policies and procedures in managing risk; our ability to market and distribute our products through distribution channels; whether all or any portion of the tax consequences of our separation from MetLife, Inc. (“MetLife”) are not as expected, leading to material additional taxes or material adverse consequences to tax attributes that impact us; the uncertainty of the outcome of any disputes with MetLife over tax-related or other matters and agreements or disagreements regarding MetLife’s or our obligations under our other agreements; the potential material negative tax impact of potential future tax legislation that could make some of our products less attractive to consumers; and other factors described from time to time in documents that we file with the U.S. Securities and Exchange Commission(the "SEC"). Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

About Brighthouse Financial, Inc.
Brighthouse Financial, Inc. (Brighthouse Financial) (Nasdaq: BHF) is on a mission to help people achieve financial security. As one of the largest providers of annuities and life insurance in the U.S.,1 we specialize in products designed to help people protect what they’ve earned and ensure it lasts. Learn more at brighthousefinancial.com.

1 Ranked by 2019 admitted assets. Best’s Review®: Top 200 U.S. Life/Health Insurers. A.M. Best, 2020

Contact:

For Investors:
David Rosenbaum
(980) 949-3326
david.rosenbaum@brighthousefinancial.com

For Media:
Deon Roberts
(980) 949-3071
deon.roberts@brighthousefinancial.com

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