MET•MET•Hedge fund manager Lee Robinson has ramped up CDS short positions against major insurers including MetLife, with net notional US insurers’ CDS bets rising to $5.5 billion by May 22. MetLife holds about $85 billion of private fixed-income assets, 95% rated investment grade, raising concerns over potential writedowns.
Hedge fund manager Lee Robinson has increased bearish wagers on insurance companies, including MetLife, using credit default swaps after identifying rising risks in private credit exposures. His net notional bearish bets on US insurers climbed to $5.5 billion by May 22, up from $4.9 billion at year-end.
MetLife’s CFO reported that as of March 31 the company held approximately $85 billion of private fixed-income assets, 95% of which are rated investment grade and diversified across market cycles. This substantial exposure to less liquid debt instruments underpins concerns about potential writedowns if private credit underperforms.
The cost of protection against defaults on major insurers has started to widen, with Lincoln National’s CDS spread reaching 142 basis points and broader high-grade swaps rising marginally. This uptick signals growing market unease over insurance sector vulnerabilities linked to illiquid asset holdings.
Should private credit valuations deteriorate, MetLife could face mark-to-market losses and reduced liquidity, potentially pressuring earnings and capital ratios. These developments may heighten investor scrutiny and could influence credit ratings if writedowns materialize.
