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Standard & Poor's Ratings Services said Monday that it was keeping MetLife Inc. on watch for a ratings downgrade, citing the life insurer's plan to raise $3 billion.
The announcement came after MetLife said earlier in the day that it planned to use the proceeds from a stock and debt offering to help fund its $6.8 billion acquisition of American Life Insurance Co. from American International Group Inc.
S&P's rating on the company's long-term counterparty credit rating is currently "A-." The company's ratings were placed on credit watch Feb. 3, following its agreement to buy American Life Insurance.
In a note to investors, analyst Shellie Stoddard wrote that S&P expected to resolve the ratings watch once MetLife has secured the debt and common equity, which is expected to occur in the next month.
If MetLife is successful in its capital raise, Stoddard said S&P would likely affirm its ratings on the insurer and assign a negative outlook.
If MetLife fails to raise the maximum equity, including the 15 percent overallotment, Stoddard said S&P would likely would lower its ratings on MetLife by one notch.