A.M. Best Assigns Debt Rating to Manulife Financial Corporation's Preferred
OLDWICK, N.J. -- December 06, 2012
A.M. Best Co. has assigned a debt rating of “bbb” to the recently issued CAD
200 million, 4.0% non-cumulative rate reset Class 1 shares Series 11 of
Manulife Financial Corporation (MFC) (Toronto, Canada). This offering is a
five-year rate reset perpetual preferred share issued at CAD 25 per share. The
outlook assigned to the rating is stable.
The proceeds from the offering will be utilized for general corporate purposes
by MFC, including refinancing of maturing debt and investments in its
subsidiaries. With the issuance of the preferred shares, A.M. Best notes that
MFC’s existing financial leverage remains temporarily elevated and is expected
to decline following forthcoming debt maturities in 2013. However, MFC’s
financial leverage remains within the range that supports its current ratings.
The company reported net losses in its third quarter 2012 International
Financial Reporting Standards’ financial results due to a large CAD 1 billion
charge related to its annual review of actuarial assumptions and a $200
million goodwill write-off. Despite the loss during the quarter, earnings
remain modestly positive on a year-to-date 2012 basis.
The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Key criteria utilized include: “Insurance Holding Company and Debt
Ratings” and “Equity Credit for Hybrid Securities.” Best’s Credit Rating
Methodology can be found at www.ambest.com/ratings/methodology
Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more information,
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.
Edward Kohlberg, 908-439-2200, ext. 5664
Senior Financial Analyst
Stephen Irwin, 908-439-2200, ext. 5454
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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