Corebridge Financial, Inc. (NYSE:CRBG) has successfully issued $600 million in junior subordinated notes, the company disclosed in a recent SEC filing. The 6.375% notes, due in 2054, were sold on Thursday and are part of the company's strategic financing efforts.
The life insurance giant, formerly known as SAFG Retirement Services, Inc., entered into an underwriting agreement with a consortium of banks including Wells Fargo (NYSE:WFC) Securities, BofA Securities, J.P. Morgan Securities, Morgan Stanley (NYSE:MS), and RBC Capital Markets on Monday. The proceeds from the note issuance are earmarked for general corporate purposes.
The transaction also involved the execution of a third supplemental indenture between Corebridge and The Bank of New York Mellon (NYSE:BK), who is serving as the trustee. Legal validity for the notes was provided by Debevoise & Plimpton LLP, as indicated in the filing.
This financial move by Corebridge reflects its ongoing efforts to secure long-term capital, with the notes offering a fixed interest rate until their maturity in 30 years. The company's strategic financing activities, as evidenced by this issuance, are aimed at strengthening its financial base for future operations and investments.
In other recent news, Corebridge Financial announced strong results for its third quarter in the 2024 Earnings Call. The company reported a 31% year-over-year increase in operating earnings per share (EPS) to $1.38, and individual retirement premiums and deposits experienced a significant surge of 40% to $5.5 billion. Corebridge's financial position remains solid, having returned a total of $1.8 billion to shareholders year-to-date.
The company's recent developments also include the successful launch of its first registered index-linked annuity (RILA). Group Retirement and Life Insurance (NS:LIFI) sales increased by 10% and 14% respectively, while Institutional Markets reserves grew by 20%. Corebridge's diversified business model has resulted in consistent cash flows, with total distributions from domestic insurance companies expected to exceed $2 billion in 2024.
The company has a strong outlook for continued growth and efficiency in its operations, aiming to maintain its growth through organic expansion, balance sheet optimization, expense efficiency, and capital management. However, Corebridge is preparing for potential seasonal fluctuations in net flows and expenses in the fourth quarter. The company is also exploring opportunities in Bermuda for new business generation.
InvestingPro Insights
Corebridge Financial's recent $600 million note issuance aligns with several key financial trends highlighted by InvestingPro data and tips. Despite the company's negative earnings over the last twelve months, InvestingPro Tips suggest that net income is expected to grow this year, and analysts predict the company will return to profitability. This optimistic outlook may explain the company's confidence in issuing long-term debt.
The company's market capitalization stands at $17.9 billion, reflecting its significant presence in the life insurance sector. Corebridge's price-to-book ratio of 1.33 indicates that the stock is trading above its book value, which could be justified by the market's positive expectations for future growth.
Interestingly, an InvestingPro Tip reveals that management has been aggressively buying back shares, which often signals confidence in the company's future prospects. This action, combined with the recent note issuance, suggests a strategic approach to capital management and shareholder value creation.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Corebridge Financial, providing deeper insights into the company's financial health and market position.
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