Manufacturers Life Insurance plans to issue $500 million of debenture

Manulife Financial Corp. subsidiary Manufacturers Life Insurance Co. intends to issue $500 million principal amount of 4.165% fixed/floating subordinated debentures due June 1, 2022.

The debentures will bear interest at a fixed rate of 4.165% for five years and thereafter at a rate of 2.45% over the three month CDOR. The debentures mature on June 1, 2022.

Subject to prior regulatory approval, MLI may redeem the debentures, in whole or in part, on or after June 1, 2017 at a redemption price equal to par, together with accrued and unpaid interest to the date fixed for redemption.

Net proceeds from the offering will be utilized for general corporate purposes.

The offering is being done on a best efforts agency basis by a syndicate co-led by RBC Capital Markets and BMO Capital Markets and consisting of  CIBC World Markets, Scotia Capital, TD Securities, Bank of America Merrill Lynch, National Bank Financial, HSBC Securities (Canada), Desjardins Securities, Laurentian Bank Securities, Canaccord Capital and Manulife Securities.

The offering is expected to close on February 17, 2012.

“Our capital raising activity takes into account our expected refinancing requirements and recognizes that, while our capital position remains strong, there could be pressure on our common share price and bond spreads if our capital ratios decline. We see this action as prudent when faced with uncertain market and economic conditions,” Manulife President and CEO Donald Guloien said.

Source: Manulife Financial