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

Rhea-AI Summary

Brighthouse Financial, Inc. (BHF) has launched a cash tender offer for up to $500 million in aggregate for its 3.700% Senior Notes due 2027 and 4.700% Senior Notes due 2047. The tender offer is set to expire on December 8, 2021, with an early tender deadline on November 23, 2021. The purpose is to refinance the tendered notes, and the financing condition must be met before any purchases are made. Participating dealers include BofA Securities, Goldman Sachs, and Wells Fargo.

Positive

• The cash tender offer can lead to lower interest expenses if the refinancing is successful.
• The offer allows the company to manage its debt strategy effectively.

Negative

• The tender offer is contingent on raising at least $500 million from debt or preferred stock financings, which poses a risk if unmet.
• Potential investor dilution may occur if additional securities are issued to meet financing conditions.

CHARLOTTE, N.C.--(BUSINESS WIRE)-- Brighthouse Financial, Inc. (the “Company”) (Nasdaq: BHF) announced today the commencement of a cash tender offer (the “Offer”) for an aggregate purchase price of up to $500 million (the “Tender Cap”) of its 3.700% Senior Notes due 2027 (the “2027 Notes”) and 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 registered holders of the Notes (individually, a “Holder” or “you,” and collectively, the “Holders”) in accordance with, and in the order of, the corresponding Acceptance Priority Levels. The Offer is being made pursuant to and is subject to the terms and conditions, including a financing condition, set forth in the Offer to Purchase, dated November 9, 2021 (the “Offer to Purchase”) and the related Letter of Transmittal, dated November 9, 2021 (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	Acceptance Priority Level	Reference U.S. Treasury Security	Bloomberg Reference Page(1)	Fixed Spread (basis points)	Early Tender Premium(2)	Hypothetical Total Consideration(3)
3.700% Senior Notes due 2027	10922NAC7/ 10922NAA1/ U6225NAA0	$1,300,284,000	1	1.125% UST due October 31, 2026	PX1	50	$50	$1,107.55
4.700% Senior Notes due 2047	10922NAF0/ 10922NAD5/ U6225NAB8	$1,150,000,000	2	2.375% UST due May 15, 2051	PX1	175	$50	$1,171.49

(1)	The applicable page on Bloomberg from which the 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.
(2)	Per $1,000 principal amount of Notes validly tendered and not validly withdrawn and accepted for purchase in the Offer at or prior to the Early Tender Deadline. The Fixed Spread includes the Early Tender Premium.
(3)	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 24, 2021. See Schedule A of the Offer to Purchase for the applicable formula. 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 Offer is based on a hypothetical Reference Yield determined as of 10:00 a.m., New York City time, on November 8, 2021, assuming an Early Settlement Date of November 26, 2021, 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 Offer, 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 Offer. Holders are urged to read the Tender Offer Documents carefully before making any decision with respect to the Offer.

Purpose of the Offer

The purpose of the Offer is to refinance the Notes that are validly tendered and accepted for purchase in the Offer.

Details of the Offer

The Offer will expire at 11:59 p.m., New York City time, on December 8, 2021, or any other date and time to which the Company extends the Offer (such date and time, as the same may be extended, 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 23, 2021 (such date and time, as the same may be extended, 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.

Notes may be withdrawn at or prior to, but not after, 5:00 p.m., New York City time, on November 23, 2021 (such date and time, as the same may be extended, the “Withdrawal Deadline”).

The “Total Consideration” per $1,000 principal amount of Notes validly tendered and accepted for purchase pursuant to the Offer 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 BofA Securities, Inc., Goldman Sachs & Co. LLC, and Wells Fargo Securities, LLC (together, the “Dealer Managers”) at 10:00 a.m., New York City time, on November 24, 2021 (subject to certain exceptions, such time and date, as the same may be extended, 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 on such Notes 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”).

The amount of Notes of either series that the Company will purchase in the Offer on the applicable Settlement Date will be determined in accordance with the Acceptance Priority Levels as set forth in the table above, with Acceptance Priority Level 1 being the highest Acceptance Priority Level, and will be the greatest amount such that the aggregate purchase price (including principal and premium, but excluding Accrued Interest) of all Notes purchased in the Offer does not exceed the Tender Cap. Subject to applicable law, the Company expressly reserves the right, but is not obligated, to increase, decrease or eliminate the Tender Cap in its sole discretion without extending the Early Tender Deadline or the Withdrawal Deadline or otherwise reinstating withdrawal rights. If any Notes are accepted for purchase, all 2027 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Deadline will, subject to the Tender Cap, be accepted for purchase before any 2047 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Deadline are accepted for purchase pursuant to the Offer. If any Notes tendered after the Early Tender Deadline are accepted for purchase, then all 2027 Notes validly tendered and not validly withdrawn after the Early Tender Deadline and at or prior to the Expiration Date will, subject to the Tender Cap, be accepted for purchase before any 2047 Notes validly tendered and not validly withdrawn after the Early Tender Deadline and at or prior to the Expiration Date are accepted for purchase pursuant to the Offer. However, any Notes validly tendered and not validly withdrawn at or prior to the Early Tender Deadline will, subject to the Tender Cap, be accepted for purchase in priority to all Notes validly tendered and not validly withdrawn after the Early Tender Deadline and at or prior to the Expiration Date. If the aggregate purchase price (including principal and premium, but excluding Accrued Interest) of the Notes validly tendered and not validly withdrawn at or prior to the Early Tender Deadline equals or exceeds the Tender Cap, no Notes of any series validly tendered and not validly withdrawn after the Early Tender Deadline and at or prior to the Expiration Date will be accepted for purchase, regardless of the Acceptance Priority Level of such Notes. As such, we cannot assure you that any or all tendered Notes of a given Acceptance Priority Level will be accepted for purchase.

If the aggregate purchase price (including principal and premium, but excluding Accrued Interest) of Notes of a series validly tendered results in the aggregate purchase price (including principal and premium, but excluding Accrued Interest) of validly tendered Notes of such series and all series with a higher Acceptance Priority Level (if any) exceeding the Tender Cap, the amount of such Notes purchased will be determined on a prorated basis using a single proration factor applicable equally to the Notes of that series. Depending on the amount tendered and the applicable proration factor applied, if the principal amount of Notes of a series returned to a Holder as a result of proration would result in less than the minimum authorized denomination of $2,000 being returned to such Holder, the Company will either accept or reject all of such Holder’s validly tendered Notes of such series. All Notes not accepted for purchase as a result of proration or the Acceptance Priority Level will be returned to the tendering holder.

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 will be November 26, 2021. 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 will be December 10, 2021. 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 the Offer is terminated, any Notes tendered pursuant to the Offer will be promptly returned. Notes tendered pursuant to the Offer and not purchased due to Acceptance Priority Levels, proration or a defect in the tender will be returned to the tendering Holders promptly following the Expiration Time.

The 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 $500 million from one or more debt or preferred stock financings (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 applicable Settlement Date. The Company reserves the absolute right, subject to applicable law, to: (i) waive any and all conditions to the Offer, including, without limitation, the Financing Condition; (ii) extend or terminate the Offer; (iii) increase, decrease or eliminate the Tender Cap without extending the Early Tender Deadline or Withdrawal Deadline; or (iv) otherwise amend the Offer in any respect. The Offer is not conditioned upon any minimum level of participation; however, if any Notes are purchased in the Offer, such Notes will be purchased by the Company in accordance with the Acceptance Priority Levels and subject to the Tender Cap.

BofA Securities, Inc., Goldman Sachs & Co. LLC and Wells Fargo Securities, LLC are acting as dealer managers and Loop Capital Markets LLC is acting as a co-dealer manager for the Offer. Questions regarding terms and conditions of the Offer should be directed to BofA Securities, Inc. by calling toll free at +1 (888) 292-0070 or collect at +1 (980) 387-3907, Goldman Sachs & Co. LLC by calling toll free at (800) 828-3182 or collect at (212) 357-1452, Wells Fargo Securities, LLC by calling toll free at (866) 309-6318 or collect at (704) 410-4756, or Loop Capital Markets LLC by calling toll free at (800) 894-0506.

D.F. King & Co., Inc. has been appointed as information agent (the “Information Agent”) and tender agent (the “Tender Agent”) in connection with the Offer. Questions or requests for assistance in connection with the Offer 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 (877) 283-0322 (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 Offer.

None of the Company, the Company's Board of Directors, the Dealer Managers, the Tender Agent, 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 the 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 of an offer to buy, or an offer to purchase any securities. The Offer is 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 the Company. 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: 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; material differences from actual outcomes compared to the sensitivities calculated under certain scenarios and sensitivities that we may utilize in connection with our variable annuity risk management strategies; the impact of interest rates on our future ULSG policyholder obligations and net income volatility; the impact of the COVID-19 pandemic; the potential material adverse effect of changes in accounting standards, practices or policies applicable to us, including changes in the accounting for long-duration contracts; loss of business and other negative impacts resulting from a downgrade or a potential downgrade in our financial strength or credit ratings; the availability of reinsurance and the ability of the counterparties to our reinsurance or indemnification arrangements to perform their obligations thereunder; 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; our ability to market and distribute our products through distribution channels; 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 subsidiaries to pay dividends to us, and our ability to pay dividends to our shareholders and repurchase our common stock; the adverse impact on liabilities for policyholder claims as a result of extreme mortality events; 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 economic conditions in the capital markets and the U.S. and global economy, as well as geo-political or catastrophic events, on our investment portfolio, including on realized and unrealized losses and impairments, net investment spread and net investment income; the impact of events that adversely affect issuers, guarantors or collateral relating to our investments or our derivatives counterparties, on impairments, valuation allowances, reserves, net investment income and changes in unrealized gain or loss positions; the impact of changes in regulation and in supervisory and enforcement policies on our insurance business or other operations; the potential material negative tax impact of potential future tax legislation that could make some of our products less attractive to consumers; the effectiveness of our policies and procedures in managing risk; the loss or disclosure of confidential information, damage to our reputation and impairment of our ability to conduct business effectively as a result of any failure in cyber- or other information security systems; 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 or its subsidiaries over tax-related or other matters and agreements or disagreements regarding MetLife’s or our obligations under our other agreements; and other factors described in the Offer to Purchase and the documents incorporated by reference herein.

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 2020 admitted assets. Best’s Review^®: Top 200 U.S. Life/Health Insurers. A.M. Best, 2021.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211109006060/en/

For Investors:

Dana Amante

(980) 949-3073

damante@brighthousefinancial.com

For Media:

Deon Roberts

(980) 949-3071

deon.roberts@brighthousefinancial.com

Source: Brighthouse Financial, Inc.

FAQ

What is the purpose of Brighthouse Financial's tender offer?

The purpose is to refinance its 3.700% Senior Notes due 2027 and 4.700% Senior Notes due 2047.

When does the tender offer for Brighthouse Financial expire?

The tender offer is set to expire on December 8, 2021.

What is the total amount Brighthouse Financial is looking to raise in its tender offer?

Brighthouse Financial aims to raise up to $500 million in the tender offer.

What are the early tender deadlines for Brighthouse Financial's offer?

The early tender deadline is November 23, 2021, at 5:00 p.m. New York City time.

Who are the dealer managers for Brighthouse Financial's tender offer?

The dealer managers include BofA Securities, Goldman Sachs, and Wells Fargo.