MFC.PR.I To Be Extended

Manulife Financial Corporation has announced (on July 27):

that it does not intend to exercise its right to redeem all or any of its currently outstanding 10,000,000 Non-cumulative Rate Reset Class 1 Shares Series 9 (the “Series 9 Preferred Shares”) (TSX: MFC.PR.I) on September 19, 2017. As a result, subject to certain conditions described in the prospectus supplement dated May 16, 2012 relating to the issuance of the Series 9 Preferred Shares (the “Prospectus”), the holders of the Series 9 Preferred Shares have the right, at their option, to convert all or part of their Series 9 Preferred Shares on a one-for-one basis into Non-cumulative Floating Rate Class 1 Shares Series 10 of Manulife (the “Series 10 Preferred Shares”) on September 19, 2017. A formal notice of the right to convert Series 9 Preferred Shares into Series 10 Preferred Shares will be sent to the registered holders of the Series 9 Preferred Shares in accordance with the share conditions of the Series 9 Preferred Shares. Holders of Series 9 Preferred Shares are not required to elect to convert all or any part of their Series 9 Preferred Shares into Series 10 Preferred Shares. Holders who do not exercise their right to convert their Series 9 Preferred Shares into Series 10 Preferred Shares on such date will retain their Series 9 Preferred Shares, unless automatically converted in accordance with the conditions below.

The foregoing conversion right is subject to the conditions that: (i) if, after September 5, 2017, Manulife determines that there would be less than 1,000,000 Series 9 Preferred Shares outstanding on September 19, 2017, then all remaining Series 9 Preferred Shares will automatically be converted into an equal number of Series 10 Preferred Shares on September 19, 2017, and (ii) alternatively, if, after September 5, 2017, Manulife determines that there would be less than 1,000,000 Series 10 Preferred Shares outstanding on September 19, 2017, then no Series 9 Preferred Shares will be converted into Series 10 Preferred Shares. In either case, Manulife will give written notice to that effect to any registered holders of Series 9 Preferred Shares affected by the preceding minimums on or before September 12, 2017.

The dividend rate applicable to the Series 9 Preferred Shares for the 5-year period commencing on September 20, 2017, and ending on September 19, 2022, and the dividend rate applicable to the Series 10 Preferred Shares for the 3-month period commencing on September 20, 2017, and ending on December 19, 2017, will be determined and announced by way of a news release on August 21, 2017. Manulife will also give written notice of these dividend rates to the registered holders of Series 9 Preferred Shares.

Beneficial owners of Series 9 Preferred Shares who wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (Toronto time) on September 5, 2017. Conversion inquiries should be directed to Manulife’s Registrar and Transfer Agent, CST Trust Company, at 1-800-387-0825.

Subject to certain conditions described in the Prospectus, Manulife may redeem the Series 9 Preferred Shares, in whole or in part, on September 19, 2022 and on September 19 every five years thereafter and may redeem the Series 10 Preferred Shares, in whole or in part, after September 19, 2017.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 10 Preferred Shares effective upon conversion. Listing of the Series 10 Preferred Shares is subject to Manulife fulfilling all the listing requirements of the TSX and, upon approval, the Series 10 Preferred Shares will be listed on the TSX under the trading symbol “MFC.PR.T”.

MFC.PR.I is a FixedReset, 4.40%+286, that commenced trading 2012-5-24 after being announced 2015-5-16.

I will have more on this when the reset rate is announced on August 21.

One Response to “MFC.PR.I To Be Extended”

  1. hrseymour says:

    Looking forward to your further input once the reset rate is announced!

    BTW the redemption schedule for MFC.PR.I on PrefInfo.com is incorrect. It shows:

    Redemption 2016-12-19 2016-12-19 25.000000
    Redemption 2021-12-19 2021-12-19 25.000000

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