Metlife, Inc. · NYSE:MET

Metlife — Investor Presentation (February 2009)

25 slides from Metlife's investor presentation, Feb 9, 2009

  1. Slide 1: MetLife Commercial Mortgage Portfolio

    MetLife Commercial Mortgage Portfolio Robert Merck February 9, 2009

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement These materials may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events.

  3. Slide 3: MetLife Investments

    MetLife Investments Total Portfolio: Diversified portfolio across many sectors Liability Driven: Asset-liability management Team Investment Approach: 580+ investment and support professionals Risk Management: Part of our culture *Market value as of 12/31/08 Investment Grade Corporate Bonds Structure

  4. Slide 4: Mortgage Portfolio Overview

    MetLife Mortgage Portfolio Overview MetLife Mortgages vs. Securitized Loans Pre 1991 vs. Pre 2008 MetLife Commercial Mortgage Portfolio Presentation Overview

  5. Slide 5: Real Estate Investments Introduction

    MetLife Real Estate Investments Introduction $36.0 billion mortgage portfolio Portfolio lender Mortgages are originated, managed and held by MetLife Real Estate investor for over 100 years Approximately 1,000 loans Extensive field office network

  6. Slide 6: MetLife Real Estate Investments Field Office Network

    Northeast Washington D.C. Atlanta Tampa Chicago Dallas San Francisco Los Angeles Latin America Canada Europe Asia Pacific MetLife Real Estate Field Offices MetLife Real Estate Investments Field Office Network

  7. Slide 7: Commercial Mortgage Portfolio Strategy

    MetLife Commercial Mortgage Portfolio Portfolio Strategy Focus primarily on Class 'A' properties in primary markets Maintained sustainable underwriting standards Targeted moderate and low leverage loans Proactive portfolio management Virtually no delinquencies

  8. Slide 8: Concentrated in Core, Stabilized Collateral

    Office Retail Apartments Hotels Industrial Other GAAP BV 42.6 22.3 11.4 8.6 8.1 7 MetLife Commercial Mortgage Portfolio Concentrated in Core, Stabilized Collateral Portfolio Distribution by Property Type* *Book value as of 12/31/08

  9. Slide 9: Pruning Potential Problems Through-the-Cycle

    MetLife Commercial Mortgage Portfolio Pruning Potential Problems Through-the-Cycle Annual Transaction activity 2002 100.8364295 2003 122.9515007 2004 205.5975354 2005 304.9680358 2006 352.4701833 2007 501.1056727 2008 130.4029568 2009 Trend 65 Source: Real Capital Analytics * YTD through November 20

  10. Slide 10: Low Leverage Strategy

    MetLife Commercial Mortgage Portfolio Low Leverage Strategy Low Leverage Strategy Low Leverage Strategy Portfolio Distribution by Loan-to-Value (LTV)* 80% LTV and up (3%) 76% to 80% LTV (5%) 65% to 75% LTV (29%) Below 65% LTV (63%) Average LTV = 58% *As of 12/31/08

  11. Slide 11: Managing Leverage Through the Real Estate Cycle

    2001 2002 2003 2004 2005 2006 2007 4Q08 MetLife LTV 0.69 0.69 0.65 0.66 0.63 0.62 0.61 0.53 Moodys LTV 0.72 0.73 0.73 0.73 0.71 0.699 Decreased LTV as market underwriting became more lax MetLife underwritten property values MetLife Commercial Mortgage Portfolio Managing Leverage Through the Real Est

  12. Slide 12: Fundamental Differences vs. CMBS Loans

    MetLife Mortgage Portfolio Overview MetLife Mortgages vs. Securitized Loans Pre 1991 vs. Pre 2008 MetLife Commercial Mortgage Portfolio Fundamental Differences vs. CMBS Loans

  13. Slide 13: Mortgages vs. Securitized Loans

    MetLife Mortgages vs. Securitized Loans MetLife Originate to own Sustainable income Relatively low leverage Originate to sell "Pro forma" income Higher leverage Securitized Loans

  14. Slide 14: Peter Cooper / Stuyvesant Town Transaction; Lending Volume

    Peter Cooper / Stuyvesant Town Transaction Ins. Co. Lending Volume (ACLI) CMBS Lending Volume NCREIF Property Valuation Index 88 Q1 5.321804 0.0054 359.66 88 Q2 6.33541 0.535598 366.84 88 Q3 4.715738 0.34117 375.62 88 Q4 5.697393 0.417495 387.15 89 Q1 3.343214 0.542218 393.93 89 Q2 4.693857 0.876583

  15. Slide 15: Example: MetLife Mortgage vs. CMBS Mortgage

    Example: MetLife Mortgage vs. CMBS Mortgage Lending Strategy Makes a Difference MetLife Mortgage CMBS Mortgage Property type Retail - Dominant mall Retail - Lifestyle Center Market Stabilized Development Loan-to-value 55% LTV 69% LTV Occupancy 99% 92% Pro forma DCR (Y1) 1.8x 1.3x Achieved DCR (Y1) 1

  16. Slide 16: Market Observations and Expectations

    MetLife Mortgage Portfolio Overview MetLife Mortgages vs. Securitized Loans Pre 1991 vs. Pre 2008 MetLife Commercial Mortgage Portfolio Market Observations and Expectations

  17. Slide 17: 2008 Recession vs. 1991 Recession Similarities and Differences

    Key similarities: Devaluation pressure Lack of credit Key differences: New supply Existing fundamentals MetLife Mortgage credit quality 2008 Recession vs. 1991 Recession Similarities and Differences

  18. Slide 18: 2008 Recession vs. Early 1990s: New Supply

    2008 Recession vs. Early 1990s: New Supply Manageable Supply Levels (Office) -4 -3 -2 -1 1991 Recession 0.0569 0.0462 0.0468 0.0323 2008 Recession 0.0103 0.0116 0.0161 0.0188 North Source: Torto Wheaton Research Years leading up to recession Market New Supply Growth (Office) 1987 1988 1989 1990 2004

  19. Slide 19: 2008 Recession vs. Early 1990s: Vacancy

    2008 Recession vs. Early 1990s: Vacancy Starting the Recession with Lower Vacancy (Office) -5 -4 -3 -2 -1 1991 Recession 0.185 0.18 0.18 0.185 0.189 2008 Recession 0.154 0.136 0.126 0.126 0.138 Source: Torto Wheaton Research 1987 1988 1989 1990 2004 2005 2006 2007 Years leading up to recession Marke

  20. Slide 20: 2008 Recession vs. Early 1990s: Credit Quality

    2008 Recession vs. Early 1990s: Credit Quality Lower Delinquencies -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 1991 Recession 0.0061 0.0076 0.0085 0.0085 0.0113 0.0272 0.027 0.0249 0.0242 0.0369 2008 Recession 0.0048 0.0025 0.0028 0.0012 0.0028 0.0012 0.0008 0.0005 0.0002 0.0001 North Source: American Council of

  21. Slide 21: 2008 Recession vs. Early 1990s Market Summary

    2008 Recession vs. Early 1990s Market Summary Pre 1991 Pre 2008 New construction % of total US office supply 6.6% 2.0% Vacancy rate US office market vacancy 18.5% 12.6% Delinquency rate YE 1990 vs. YE 2007 3.7% 0.01% Sources: Torto Wheaton Research, American Council of Life Insurers (ACLI)

  22. Slide 22: MetLife Lessons Learned

    Then Underwritten DCRs less than 1.2x "Pro forma" income Majority of originations between 70-80% LTV In place DCR of 1.8x Sustainable income Majority of originations between 50-65% LTV Now 2008 Recession vs. Early 1990s MetLife Lessons Learned

  23. Slide 23: Lessons Learned

    1st Qtr 2nd Qtr East 0.28 0.72 MetLife Commercial Mortgage Portfolio Lessons Learned 1st Qtr 2nd Qtr East 0.03 0.97 12/31/1990 12/31/2008 Above 80% LTV (28%) Below 80% LTV (72%) Below 80% LTV (97%) Above 80% LTV (3%)

  24. Slide 24: Summary

    Implemented lessons learned from early 1990s Executed a lower leverage, core collateral strategy through the cycle Fundamental differences between CMBS and life company mortgages MetLife mortgage portfolio defensively positioned MetLife Commercial Mortgage Portfolio Summary

  25. Slide 25: MetLife

    MetLife

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