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FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 24, 2021 10:41 AM (EST)
AM Best has assigned a Long-Term Issue Credit Rating of “bbb+” to the CAD 2.0 billion, 3.375% Limited Recourse Capital Notes Series 1 (the Notes) due June 19, 2081, recently issued by Manulife Financial Corporation (MFC) (Toronto, Canada). The outlook assigned to this Credit Rating (rating) is stable.
The Notes are issued simultaneously with 2,000,000 Non-Cumulative Fixed Rate Class 1 Shares Series 27 (Series 27 Shares), which will be held by Computershare Trust Company of Canada as trustee of a newly formed trust – The Limited Recourse Trust. In the event that MFC does not pay interest on or principal of the Notes when due, the recourse to each noteholder will be limited to their proportionate share of the Series 27 Shares, except in limited circumstances. Interest on the Notes at 3.375% will become due and will be paid in equal semi-annual installments in arrears on June 19 and December 19 of each year, with the first short coupon payment due on June 19, 2021. Starting on June 19, 2026 and on every fifth anniversary of such date thereafter until June 19, 2076, the interest rate on the Notes will be reset.
The Notes will be treated as Tier 1 capital. The proceeds will be used for general corporate purposes, including investment in subsidiaries. AM Best expects that MFC’s financial leverage will continue to remain within AM Best 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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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.