MFC.PR.F / MFC.PR.P : Net Conversion of 3% To FixedReset

Manulife Financial Corporation has announced (on 2021-6-7):

that after having taking into account all election notices received by the June 4, 2021 deadline for conversion, 812,380 of its currently outstanding 6,335,831 Non-cumulative Rate Reset Class 1 Shares Series 3 (the “Series 3 Preferred Shares”) have been elected for conversion on June 19, 2021, on a one-for-one basis, into Non-cumulative Floating Rate Class 1 Shares Series 4 of Manulife (the “Series 4 Preferred Shares”), and 1,014,452 of its currently outstanding 1,664,169 Series 4 Preferred Shares have been elected for conversion on June 19, 2021, on a one-for-one basis, into Series 3 Preferred Shares.

As a result, on June 19, 2021, Manulife will have 6,537,903 Series 3 Preferred Shares and 1,462,097 Series 4 Preferred Shares issued and outstanding. The Series 3 Preferred Shares and the Series 4 Preferred Shares are listed on the Toronto Stock Exchange under the symbols MFC.PR.F and MFC.PR.P, respectively.

As announced by Manulife on May 21, 2021, after June 19, 2021, holders of Series 3 Preferred Shares will be entitled to receive fixed rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of Manulife (the “Board”) and subject to the provisions of the Insurance Companies Act (Canada). The dividend rate for the five-year period commencing on June 20, 2021, and ending on June 19, 2026, will be 2.34800% per annum or $0.146750 per share per quarter, being equal to the sum of the five-year Government of Canada bond yield as at May 21, 2021, plus 1.41%, as determined in accordance with the terms of the Series 3 Preferred Shares.

As announced by Manulife on May 21, 2021, after June 19, 2021, holders of Series 4 Preferred Shares will be entitled to receive floating rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board and subject to the provisions of the Insurance Companies Act (Canada). The dividend rate for the three-month period commencing on June 20, 2021, and ending on September 19, 2021, will be 0.38363% (1.52200% on an annualized basis) or $0.095908 per share, being equal to the sum of the three-month Government of Canada Treasury bill yield as at May 21, 2021, plus 1.41%, as determined in accordance with the terms of the Series 4 Preferred Shares.

MFC.PR.F was issued as a 4.20%+141 FixedReset that commenced trading 2011-3-11 after being announced 2011-3-7. Notice of extension was published in 2016 and the rate reset to 2.178%. I recommended that holders not convert to FloatingResets but there was a 21% conversion anyway. In 2021, the dividend rate on MFC.PR.F reset to 2.348%.

MFC.PR.P is a FloatingReset, Bills+141bp, which arose via a partial conversion from MFC.PR.F in 2016.

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