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Manulife Financial Prices Notes
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ShareManulife Financial Corporation (MFC - Analyst Report) has priced its public offer of two series of senior notes aggregating $1.1 billion–$600 million of 3.40% senior notes due 2015 and $500 million of 4.90% senior notes due 2020.
Manulife Financial is offering the 3.40% senior notes at 99.854% of face value and 4.90% senior notes at 99.844% of face value.
The company intends to use the net proceeds from the sale of the notes for general corporate purposes, including investments in its subsidiaries.
Manulife Financial ended the second quarter of 2010 with a long-term debt balance of $3.2 billion (C$3.3 billion), compared with $3.7 billion (C$4.3 billion) at the end of the second quarter of 2009, reflecting a reduction of $0.6 billion over a one-year period. The debt-to-capital ratio was 10.3% at second-quarter 2010 end, lower than 13.1% at the end of second-quarter 2009. The issuance of $1.1 billion of debt will increase the debt-to-capital ratio by 319 basis points.
The company incurred interest expenses of $255 million (C$262 million) in the second quarter of 2010, much lower than $529 million (C$543 million) in the prior-year period. With the new debt issuance, the company will have to dish out an additional $44.9 million annually.
Recently, the company filed a securities offering of $9.4 billion (C$10 billion) with the Canadian and U.S. regulators.
The company also completed its offer aggregating $871 million (C$900 million) of medium-term notes. The notes will bear a coupon of 4.079% maturing on August 20, 2015. The notes were issued under its medium-term note program.
Headquartered in Toronto, Canada, Manulife Financial through its subsidiaries operates as a life insurance company. The company also offers reinsurance services. The company operates as Manulife Financial in Canada and Asia and primarily as John Hancock in the United States.
We currently maintain a “Neutral” recommendation on Manulife Financial. The quantitative Zacks #4 Rank (short-term Sell rating) for the company indicates downward directional pressure on the shares over the near term.
Read the full analyst report on MFC
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