MetLife Inc. loaned $505 million to help refinance a hotel portfolio at Universal Orlando Resort as the largest U.S. life insurer seeks higher-yielding assets.
MetLife extended the loan to an investor group including affiliates of Loews Hotels & Resorts, NBCUniversal and Hard Rock International, the New York-based company said Thursday in a statement. The fixed-rate loan for the Florida portfolio has a term of 10 years.
The insurer has been pushing into real estate and agricultural lending to diversify its portfolio as near record low interest rates squeeze profits on traditional holdings such as bonds. The insurer lent $12.1 billion on commercial properties in 2014, a 5 percent increase from the previous year.
“These are proven properties in a major market for MetLife,” Robert Merck, senior managing director and global head of real estate for MetLife, said in the statement. “The ownership group has proven hotel expertise, considerable financial strength and demonstrated commitment to capital reinvestment.”
MetLife held about 12 percent of its $516.8 billion investment portfolio in mortgage loans as of March 31, according to a document on the insurer’s website. The company posted a 4.8 percent yield on the mortgage-loan portion of its portfolio in the first quarter, 16 basis points more than the yield on its fixed-maturity securities part. A basis point is 0.01 percentage point.
Loews Corp. Chief Executive Officer Jim Tisch in May deemed the lodging business as the “proverbial cover girl of this year” for the holding company. That’s because growth in the operation has helped cushion a slump in energy subsidiaries, and the hotel unit was featured on the front of Loews’s annual report.