Ms. Odette Coleman reports
MANULIFE ANNOUNCES LIMITED RECOURSE CAPITAL NOTES ISSUE
Manulife Financial Corp. intends to issue $2-billion principal amount of 3.375 per cent limited recourse capital notes, Series 1. MFC intends to file a prospectus supplement to its existing base shelf prospectus in respect of this issue.
The notes will bear interest at a fixed rate of 3.375 per cent annually, payable semi-annually, for the initial period ending on, but excluding, June 19, 2026. Thereafter, the interest rate on the notes will reset every five years at a rate equal to the prevailing five-year government of Canada yield plus 2.839 per cent. The notes mature on June 19, 2081.
In connection with the issuance of the notes, MFC will issue two million non-cumulative fixed rate reset Class 1 shares, Series 27, to be held by Computershare Trust Company of Canada as trustee of a newly formed trust (Limited Recourse Trust). In case of non-payment of interest on or principal of the notes when due, the recourse of each noteholder will be limited to that holder's proportionate share of the Limited Recourse Trust's assets, which will consist of Series 27 shares except in limited circumstances.
Subject to prior regulatory approval, MFC may redeem the notes, in whole or in part on not less than 15 nor more than 60 days prior notice by MFC, during the period from May 19 to, and including, June 19, commencing in 2026 and every five years thereafter, at a redemption price equal to par, together with accrued and unpaid interest up to, but excluding, the date of redemption.
The offering is being done on a best-efforts agency basis by a syndicate co-led by RBC Capital Markets, BMO Capital Markets, CIBC Capital Markets, Scotiabank and TD Securities. The offering is expected to close on Feb. 19, 2021.
MFC intends to use the net proceeds from the offering for general corporate purposes, including investment in subsidiaries.
Manulife Financial is a leading international financial services group that helps people make their decisions easier and lives better. With its global headquarters in Toronto, Canada, the company operates as Manulife across its offices in Canada, Asia and Europe, and primarily as John Hancock in the United States. Manulife provides financial advice, insurance, and wealth and asset management solutions for individuals, groups and institutions. At the end of 2020, it had more than 37,000 employees, over 118,000 agents and thousands of distribution partners, serving over 30 million customers. As of Dec. 31, 2020, Manulife had $1.3-trillion ($1.0-trillion (U.S.)) in assets under management and administration, and in the previous 12 months Manulife made $31.6-billion in payments to its customers. Manulife's principal operations are in Asia, Canada and the United States where it has served customers for more than 155 years. Manulife trades as MFC on the Toronto, New York and the Philippine stock exchanges, and under 945 in Hong Kong.
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