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A.M. Best Assigns Debt Rating to The Manufacturers Life Insurance Company's New Subordinated Debt Offering



  A.M. Best Assigns Debt Rating to The Manufacturers Life Insurance Company's
  New Subordinated Debt Offering

Business Wire

OLDWICK, N.J. -- February 25, 2013

A.M. Best Co. has assigned a debt rating of “a” to the recently issued CAD 200
million, 2.819% aggregate principal fixed/floating subordinated debentures due
February 26, 2023 of The Manufacturers Life Insurance Company (MLI) (domiciled
in Toronto, Canada). The assigned outlook is stable.

The proceeds from the offering will be utilized for general corporate purposes
including refinancing of debt. MLI may redeem the debentures on or after
February 26, 2018. The debentures are fully and unconditionally guaranteed on
a subordinated basis by the holding company, Manulife Financial Corporation
(MFC). With the issuance of the subordinated debentures, A.M. Best notes that
MFC’s existing financial leverage remains temporarily elevated and is expected
to decline following forthcoming debt maturity in 2013. However, MFC’s
financial leverage remains within the range that supports its current ratings.

MFC reported a positive net gain in its fourth-quarter 2012 net income, over
the same quarter in 2011, primarily due to an increase in its fee income on
higher funds under management, growth in its insurance sales, improvement in
new business margins and investment related gains. Earnings of MFC, an
International Financial Reporting Standards’ reporter, have recently been
impacted by the volatility in its realized and unrealized gains on assets
supporting insurance and investment contract liabilities mainly due to the
impact of interest rate changes on bond and fixed income derivative positions
as well as interest rate swaps that support the company’s dynamic hedging
program.

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. 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,
visit www.ambest.com.

       Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contact:

A.M. Best Co.
Edward Kohlberg, 908-439-2200, ext. 5664
Senior Financial Analyst
edward.kohlberg@ambest.com
or
Raj Shah, 908-439-2200, ext. 5409
Assistant Vice President
raj.shah@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com
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