Prudential's Relatively High Multiple May Be Justified
Jul. 28, 2014, 11:41 AM
- The 25 Altbau buildings with over 538K square feet in Berlin - jointly owned by Prudential (NYSE:PRU) Real Estate investors and a local partner who managed the holdings - were sold for about $105M.
Jul. 8, 2014, 7:25 AM
Jun. 18, 2014, 5:02 PM
- The trustee units of Detusche Bank (DB), U.S. Bancorp (USB), Wells Fargo (WFC), HSBC, and Bank of New York Mellon (BK) face a lawsuit by an investor group led by BlackRock (BLK) and Pimco (and also including PRU and SCHW) over their role in overseeing and enforcing terms on more than 2K mortgage-backed bonds between 2004 and 2008.
- The group is seeking damages for losses on the paper that have surpassed $250B, reports the WSJ. At issue, say the plaintiffs, is the banks breaching their duty to bondholders by failing to force the lenders and bond issuers to repurchase poorly underwritten loans.
- A similar plaintiffs group has already won settlements from Bank of America and JPMorgan for their roles in originating and selling toxic mortgages.
Jun. 18, 2014, 11:34 AM
- Prudential Financial's (PRU) commercial lending subsidiary provides $131.7M in first mortgages to longstanding client Lock Up/Evergreen Storage secured by a portfolio of 18 self-storage facilities throughout the country.
- The financing is comprised of a $20M, 7-year, floating-rate tranche, and a $111.7M, 10-year, fixed rate tranche.
Jun. 16, 2014, 9:39 AM
- "Better diversification, financial flexibility, market position and capital adequacy are the key drivers of the single notch difference between insurance peers MetLife (MET -0.5%) and Prudential Financial (PRU)," says Moody's in a new report.
- Met's domestic insurers are rated Aa3 and Prudential's A1 for insurance financial strength. MetLife's holding company is A3, and Prudential's Baa1.
- MetLife has a meaningful presence in more countries than Prudential, says Moody's, and its U.S. market share in group insurance "stands out compared to Prudential."
- Moody's also notes Prudential's aggressiveness with share repurchases - pleasing to stockholders, but a marginal negative for the agency's debt-focused customers.
Jun. 11, 2014, 10:04 AM
- Prudential Real Estate Investors (a unit of PRU) and the Third Swedish National Pension Fund, AP3 have formed a JV to invest in German retail properties and the partership has acquired one portfolio and agreed to the purchase of another.
- The sum total of the two deal is around $361M.
Jun. 10, 2014, 4:23 PM
- Its $1B buyback from one year ago set to expire at the end of the month, Prudential Financial (PRU) authorizes another $1B plan to start on July 1.
- Through the end of Q1, Prudential has repurchased $750M worth of common stock under the previous plan.
- Shares +0.5% AH
- Earlier today: Wait is over: MetLife announces $1B buyback
Jun. 9, 2014, 10:42 AM
- On behalf of German institutional investors, Prudential Real Estate Investors (a unit of PRU) teams with L&L Holding to buy three interconnected office properties adjacent to the High Line for $160M. The properties feature 200K square feet of space, including 300 feet of retail frontage on a key NYC art gallery block.
Jun. 4, 2014, 10:56 AM
- Providing a particular boost to the large insurers, the Senate today approves a bill giving the Fed the flexibility to tailor capital rules for insurers which may fall under their purview - as opposed to original Dodd-Frank language which could have required a "one size fits all" policy in which insurers would have faced the same capital rules as those applied to largest banks.
- “It is becoming increasingly clear that the Fed will be given the flexibility to tailor its regulation of insurance companies,” says FBR's Ed Mills. “This should be a strong positive for the insurance firms deemed systemically important.”
- Speaking at his company's annual meeting today (webcast and presentation slides), Prudential (PRU +2.7%) Vice Chairman Mark Grier is pleased with the Senate action and says his company can meet any reasonable capital standard.
- MetLife (MET +2.5%), AIG (AIG +0.9%)
Jun. 4, 2014, 10:28 AM
- The life insurance sector mostly in the green after Dai-ichi purchases Protective Life for nearly 1.7x March 31 book value (excluding AOCI).
- Not exactly take-out candidates, MetLife (MET +2.5%) trades for 1.1x book and Prudential (PRU +2.5%) at 1.4x book. Lincoln National (LNC +1.9%) - with a market cap of $13.4B - trades for 1.1x book.
- Others: Primerica (PRI +0.5%), Kansas City Life (KCLI +0.5%).
- Previously: Dai-ichi snaps up Protective Life
Jun. 3, 2014, 1:09 PM
- Yesterday, Thomas Sullivan was named to oversee the Fed's regulation of non-bank systemically important financials, which at this point includes AIG and Prudential (PRU), and may eventually include MetLife (MET).
- Sullivan led the Connecticut Insurance Department from 2007-10, and before that spent more than two decades at Hartford Financial. His new position won't give him final say on decisions affecting the big insurers and their capital requirements, but he will have an important voice.
- "State regulation of insurance has protected insurance consumers and companies from the worst of the financial crisis," said Sullivan to Congress in 2009. "The business of insurance has not created the kinds of unrestrained and unregulated systemic risks that reform efforts seek to manage or prevent.”
- Said "reform efforts" eventually morphed into Dodd-Frank, and insurers (particularly MetLife) are lobbying to either prevent being named SIFIs or, if they are named as such, to prevent them being placed under the same capital regime as banks.
- Previously: Fed hires official to oversee AIG, Prudential
Jun. 2, 2014, 3:51 PM
- Thomas Sullivan - who led the Connecticut Insurance Department from 2007-10 and later worked for PwC - has been hired to oversee non-bank financials which have been designated as SIFIs (so far AIG and PRU, along with GE's finance arm). He starts his job in one week.
- Sullivan fills an expertise gap for the Fed which is used to regulating banks, but doesn't have as much experience with non-banks like major insurers.
- At issue for Sullivan are complaints (led by potential SIFI MET) that capital rules for insurers need to be crafted very differently than those for banks.
- Previously: MetLife lobbies against SIFI designation and capital standards
May 16, 2014, 7:01 AM
May 15, 2014, 11:43 AM
- Hit particularly hard in today's selloff are the life insurers, whose hopes of beginning to get better returns on their fixed-income investments in 2014 look dashed at the moment.
- Off another six basis points today to 2.48%, the 10-year Treasury yield - above 3% at the start of this year - is all the way back to levels seen last summer.
- Leading the decline is Lincoln National (LNC -6%). Others: MetLife (MET -3.2%), Prudential (PRU -3.7%), Protective Life (PL -3.8%).
- Related ETFs: KIE, IAK, KBWP, KBWI
- Previously: Strong economic data doesn't slow Treasury rally; Wal-Mart in focus
May 14, 2014, 1:18 PM
- In a search for yield, U.S. life insurers have significantly boosted issuance of Funding Agreement Note Issuance Program debt (FANIPs), says Moody's. Insurers use the FANIPs for funding, tilting the investing of the proceeds - given today's low-rate environment - in things like commercial mortgages, public corporate debt, and private placements.
- Popular pre-crisis and stagnant since, "these funding agreement instruments are showing signs of life," says Moody's analyst Rokhaya Cisse. This year through April, issuance is up by about 56% to $8.8B from the same year-ago period. Among the seven insurers which have issued the funding this year are MetLife (MET -1.7%), Principal Financial (PFG -1.4%), and Prudential (PRU -1.6%).
- While Moody's doesn't expect issuance to reach pre-crisis levels, the boosted level "is credit negative because they present liquidity and asset-liability management risks that can emerge during capital markets disruptions."
May 13, 2014, 4:45 PM
- Prudential Financial, Inc. (PRU) declares $0.53/share quarterly dividend, in line with previous.
- Forward yield 2.51%
- Payable June 19; for shareholders of record May 27; ex-div May 22.
Prudential Financial, Inc. provides a wide range of insurance, investment management, and other financial products and services to both individual and institutional customers throughout the United States and in many other countries through its subsidiaries. Its principal products and services... More
Industry: Life Insurance
Country: United States