Bloomberg News

MetLife Posts Best Week Since 2011 on Higher Bond Yields

January 04, 2013

MetLife Heads for Best Week Since 2011 on Yields

The MetLife Inc. headquarters building stands in New York. Photographer: Scott Eells/Bloomberg

MetLife Inc. (MET:US), the largest U.S. life insurer, posted its biggest weekly advance since 2011 on the prospect that higher bond yields will improve earnings from the company’s fixed-maturity portfolio.

MetLife climbed 2.4 percent to $35.95 at 4:01 p.m. in New York. The New York-based insurer rallied 11 percent this week.

The yield on Treasury 10-year notes touched an eight-month high of 1.97 percent earlier today, up from 1.7 percent on Dec. 28. U.S. lawmakers this week averted tax increases for more than 99 percent of households, and Federal Reserve policy makers said yesterday they may end their $85 billion monthly bond purchases sometime this year.

“The path of least resistance in yields seems to be a bit higher now,” said Donald Ellenberger, who oversees about $10 billion as co-head of government and mortgage-backed securities at Federated Investors Inc. (FII:US) in Pittsburgh.

Higher bond yields help MetLife when the company reinvests funds from maturing securities in its $378 billion fixed-income portfolio.

To contact the reporter on this story: Dan Kraut in New York at Dkraut2@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • MET
    (MetLife Inc)
    • $55.97 USD
    • 0.08
    • 0.14%
  • FII
    (Federated Investors Inc)
    • $30.63 USD
    • -0.60
    • -1.96%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus