Back to top

Analyst Blog

Zacks Equity Research

Manulife to Issue Debentures

MFC

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

The Manufacturers Life Insurance Company , a subsidiary of  Manulife Financial Corporation (MFC - Analyst Report) proposed to issue subordinated debentures worth $504.5 (C$500) million. The debentures will bear a fixed/floating interest of 4.165% maturing on June 1, 2022.

For the first five years, the debenture will carry interest at a fixed rate of 4.165% and then at a rate of 2.45% over the three-month CDOR. The company intends to deploy the net proceeds for general corporate purposes.

At the end of the 2011, the company had $5.395 (C$5.503) billion in debt balance, lower than the year-ago level of $5.840 (C$5.841) billion. During 2011, the company’s interest expense, at $291 (C$288) million, was higher than $265 (C$273) million in the prior year.

The debt to capital ratio at 2011 end was 18.5%, lower than 19.5% at 2010 end. With this note offering, the debt level of the company will rise and the debt to capital ratio will increase by 120 basis points. The company will also have to incur a higher interest expense to service the debt.

During the fourth quarter, the company posted a net loss of $69.8 million, in contract with net profit of $1.8 billion in the prior-year quarter due to weaker insurance sales and a big write-down at its U.S. operation.

Manulife has achieved a great deal during the year in reducing potential equity markets and interest rates risk exposures along with minimizing existing risks. The company also made significant progress in diversifying its businesses, achieving growth in targeted areas and cultivating new revenue streams. However, Manulife’s capital position has suffered given the decline in the global equity markets and low bond yields.

We thus retain our Neutral recommendation on Manulife Financial. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.

Headquartered in Toronto, Canada, Manulife Financial through its subsidiaries operates as a life insurance company. It also offers reinsurance services. The company operates as Manulife Financial in Canada and Asia and primarily as John Hancock in the United States.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%