By Cristal Cody
Prospect News, Feb. 16 – Manulife Financial Corp. announced on Tuesday that it sold C$300 million of non-cumulative rate reset class 1 preferred shares on Monday with a 5.6% annual dividend for the initial period ending June 19, 2021.
The company priced 12 million shares of the series 21 preferred stock (/P-2/DBRS: Pfd-2) at C$25.00 per share.
The deal includes an over-allotment option of C$50 million, or 2 million shares.
RBC Capital Markets (Canada) Ltd., Scotia Capital Inc. and TD Securities Inc. were the lead managers.
The dividend will reset every five years at a rate equal to the five-year Government of Canada bond yield plus 497 basis points.
Series 21 preferred shareholders will have the right to convert their shares into series 22 non-cumulative rate reset class 1 shares on June 19, 2021 and on June 19 every five years thereafter. Holders of the Series 22 preferred shares will be entitled to receive non-cumulative quarterly floating dividends at a rate equal to the three-month Government of Canada Treasury Bill yield plus 497 bps.
The preferred shares are expected to qualify as Tier 1 capital for Manulife.
The company intends to use the proceeds from the offering for general corporate purposes, including future refinancing requirements.
Manulife Financial is a Toronto-based financial services and reinsurance company.
| Issuer: | Manulife Financial Corp.
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| Amount: | C$300 million, 12 million shares
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| Greenshoe: | C$50 million, 2 million shares
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| Maturity: | June 19, 2021
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| Securities: | Non-cumulative rate reset class 1 preferred shares
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| Bookrunners: | RBC Capital Markets (Canada) Ltd., Scotia Capital Inc. and TD Securities Inc.
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| Dividend: | 5.6%; resets every five years at rate equal to five-year Government of Canada bond yield plus 497 bps
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| Price: | C$25.00 per share
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| Pricing date: | Feb. 16
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| Settlement date: | Feb. 25
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| Ratings: | Standard & Poor’s: P-2
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| DBRS: Pfd-2
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| Distribution: | Canada
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