PrefBlog

Manulife Financial Corporation has announced:

a Canadian public offering of Non-cumulative Rate Reset Class 1 Shares Series 5 (“Series 5 Preferred Shares”). Manulife will issue eight million Series 5 Preferred Shares priced at $25 per share to raise gross proceeds of $200 million. The offering will be underwritten by a syndicate of investment dealers led by RBC Capital Markets and Scotia Capital Inc. and is anticipated to qualify as Tier 1 capital for Manulife. The expected closing date for the offering is December 6, 2011. Manulife has also granted the underwriters an option, exercisable in whole or in part at any time up to 48 hours prior to closing, to purchase up to an additional two million Series 5 Preferred Shares. The maximum gross proceeds raised under the offering will be $250 million should this option be exercised in full. Manulife intends to file a prospectus supplement to its September 3, 2010 base shelf prospectus in respect of this issue.

“We issue preferred shares and other capital instruments from time to time to bolster capital, believing that this action is prudent when faced with uncertain market and economic conditions. Our capital position remains strong but we recognize that there could be pressure on our common share price and bond spreads if our capital ratios decline,” said Donald Guloien, President and CEO of Manulife.

Holders of the Series 5 Preferred Shares will be entitled to receive a non-cumulative quarterly fixed dividend yielding 4.40 per cent annually, as and when declared by the Board of Directors of Manulife, for the initial period ending December 19, 2016. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 2.90 per cent.

Holders of Series 5 Preferred Shares will have the right, at their option, to convert their shares into Non-cumulative Rate Reset Class 1 Shares Series 6 (“Series 6 Preferred Shares”), subject to certain conditions, on December 19, 2016 and on December 19 every five years thereafter. Holders of the Series 6 Preferred Shares will be entitled to receive non-cumulative quarterly floating dividends, as and when declared by the Board of Directors of Manulife, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 2.90 per cent.

The net proceeds from the offering will be utilized for general corporate purposes, which may include investments in subsidiaries.

This entry was posted on Tuesday, November 29th, 2011 at 2:34 pm and is filed under New Issues. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.