AM Best Assigns Issue Credit Rating to Manulife Financial Corporation’s New Subordinated Notes

Rhea-AI Summary

AM Best has assigned a Long-Term Issue Credit Rating of bbb+ (Good) to Manulife Financial Corporation's CAD 1.0 billion, 7.117% subordinated notes, due June 19, 2082, reflecting stable outlook. Alongside this, the company will issue CAD 1.0 billion non-cumulative Class 1 shares, Series 29, with non-deferrable interest payments. The proceeds will support corporate purposes, including investments in subsidiaries. MFC’s leverage and interest coverage ratios are expected to stay within AM Best's rating guidelines.

Positive

• Long-Term Issue Credit Rating of 'bbb+' indicates solid financial health.
• 7.117% interest rate on subordinated notes is attractive for investors.
• Proceeds will be used for investments, supporting future growth.

Negative

• None.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has assigned a Long-Term Issue Credit Rating (Long-Term IR) of “bbb+” (Good) to the CAD 1.0 billion, 7.117% subordinated notes, due June 19, 2082, recently announced by Manulife Financial Corporation (MFC) (Toronto, Canada) [NYSE: MFC]. The outlook assigned to the Credit Rating (rating) is stable.

At the time of issuance of the capital notes, MFC will issue CAD 1.0 billion non-cumulative fixed rate Class 1 shares, Series 29 (Series 29 shares), which will be held by Computershare Trust Company of Canada, a trustee of Manulife LRCN Limited Recourse Trust. Interest payments are non-deferrable. In the event that payment of interest or principal is not remit when due, the recourse to each noteholder will be limited to their proportionate share of the Series 29 shares, except in limited circumstances. Interest on the notes at 7.117% will become due and will be paid in equal semiannual installments in arrears on June 19 and Dec. 19 of each year, with the first payment on Dec. 19, 2022. Starting on June 19, 2027, and on every fifth anniversary thereafter until June 19, 2077, the interest rate on the notes will be reset.

The notes will be treated as Tier 1 capital. Additionally, the proceeds will be used for corporate purposes, including investment in subsidiaries and potential future redemptions of existing securities. MFC’s leverage and interest coverage ratios are expected to remain within AM Best’s guidelines for its current rating.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220616005707/en/

Shauna Nelson

Senior Financial Analyst

+1 908 439 2200, ext. 5365

shauna.nelson@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Michael Adams

Associate Director

+1 908 439 2200, ext. 5133

michael.adams@ambest.com

Jeff Mango

Managing Director,

Strategy & Communications

+1 908 439 2200, ext. 5204

jeffrey.mango@ambest.com

Source: AM Best

FAQ

What is the credit rating assigned to Manulife Financial Corporation by AM Best?

AM Best has assigned a Long-Term Issue Credit Rating of 'bbb+' to Manulife Financial Corporation.

What is the amount of subordinated notes issued by MFC?

Manulife Financial Corporation has issued CAD 1.0 billion in subordinated notes.

When are the interest payments for MFC's subordinated notes due?

Interest payments on MFC's subordinated notes are due on June 19 and December 19 of each year.

What will the proceeds from MFC's subordinated notes be used for?

Proceeds will be used for corporate purposes, including investments in subsidiaries and potential redemptions of existing securities.

What is the interest rate on the subordinated notes issued by MFC?

The subordinated notes issued by Manulife Financial Corporation carry an interest rate of 7.117%.