MetLife 2013 Annual Report Download - page 54

U.S. and Foreign Corporate Fixed Maturity Securities
We maintain a diversified portfolio of corporate fixed maturity securities across industries and issuers. This portfolio does not have any exposure to
any single issuer in excess of 1% of total investments and the top ten holdings comprise 2% of total investments at both December 31, 2013 and
2012. The tables below present our U.S. and foreign corporate securities holdings at:
December 31,
2013 2012
Estimated
Fair
Value %of Total
Estimated
Fair
Value %of Total
(In millions) (In millions)
Corporate fixed maturity securities — by sector:
Foreign corporate(1) ................................................ $ 63,152 37.2% $ 67,184 37.1%
U.S. corporate fixed maturity securities — by industry:
Consumer ........................................................ 27,953 16.5 29,852 16.4
Industrial ......................................................... 27,462 16.2 29,324 16.2
Finance .......................................................... 20,135 11.9 21,857 12.1
Utility ............................................................ 19,066 11.2 20,216 11.1
Communications ................................................... 8,074 4.8 9,084 5.0
Other ............................................................ 3,779 2.2 3,793 2.1
Total .......................................................... $169,621 100.0% $181,310 100.0%
(1) Includes both U.S. dollar and foreign denominated securities.
Structured Securities
We held $67.2 billion and $72.6 billion of structured securities, at estimated fair value, at December 31, 2013 and 2012, respectively, as
presented in the RMBS, CMBS and ABS sections below.
RMBS
The table below presents our RMBS holdings at:
December 31,
2013 2012
Estimated
Fair
Value %of Total
Net
Unrealized
Gains (Losses)
Estimated
Fair
Value %of Total
Net
Unrealized
Gains (Losses)
(In millions) (In millions) (In millions) (In millions)
By security type:
Collateralized mortgage obligations .......... $19,046 54.3% $705 $20,567 54.9% $ 889
Pass-through securities ................... 16,009 45.7 183 16,912 45.1 924
Total RMBS .......................... $35,055 100.0% $888 $37,479 100.0% $1,813
By risk profile:
Agency ............................... $23,686 67.6% $762 $26,369 70.4% $1,944
Prime ................................. 2,935 8.4 71 4,206 11.2 101
Alt-A .................................. 4,986 14.2 (25) 4,950 13.2 (154)
Sub-prime ............................. 3,448 9.8 80 1,954 5.2 (78)
Total RMBS .......................... $35,055 100.0% $888 $37,479 100.0% $1,813
Ratings profile:
Rated Aaa/AAA ......................... $24,764 70.6% $26,555 70.9%
Rated NAIC 1 ........................... $31,385 89.5% $32,377 86.4%
Collateralized mortgage obligations are a type of mortgage-backed security structured by dividing the cash flows of mortgages into separate pools
or tranches of risk that create multiple classes of bonds with varying maturities and priority of payments. Pass-through mortgage-backed securities are
a type of asset-backed security that are secured by a mortgage or collection of mortgages. The monthly mortgage payments from homeowners pass
from the originating bank through an intermediary, such as a government agency or investment bank, which collects the payments and, for a fee,
remits or passes these payments through to the holders of the pass-through securities.
The majority of our RMBS holdings were rated Aaa/AAA by Moody’s, S&P or Fitch; and were rated NAIC 1 by the NAIC at December 31, 2013 and
2012. Agency RMBS were guaranteed or otherwise supported by Federal National Mortgage Association, Federal Home Loan Mortgage Corporation
or Government National Mortgage Association. Non-agency RMBS include prime, Alt-A and sub-prime RMBS. Prime residential mortgage lending
includes the origination of residential mortgage loans to the most creditworthy borrowers with high quality credit profiles. Alt-A is a classification of
mortgage loans where the risk profile of the borrower falls between prime and sub-prime. Sub-prime mortgage lending is the origination of residential
mortgage loans to borrowers with weak credit profiles. Included within prime and Alt-A RMBS are re-securitization of real estate mortgage investment
conduit (“Re-REMIC”) securities. Re-REMIC RMBS involve the pooling of previous issues of prime and Alt-A RMBS and restructuring the combined
pools to create new senior and subordinated securities. The credit enhancement on the senior tranches is improved through the re-securitization.
46 MetLife, Inc.