MFC.PR.D Closes: Big and Soft

Manulife Financial has announced:

that it has completed its offering of 18 million Non-cumulative 5-Year Rate Reset Class A Shares, Series 4 (the “Series 4 Preferred Shares”) at a price of $25 per share to raise gross proceeds of $450 million.

The offering was underwritten by a syndicate of investment dealers led by RBC Capital Markets and CIBC World Markets. The sale of 18 million Series 4 Preferred Shares included the exercise in full by the underwriters of their option to purchase four million shares. The Series 4 Preferred Shares commence trading on the Toronto Stock Exchange today under the ticker symbol MFC.PR.D.

The original size was 8-million shares plus 3-million greenshoe; the thing sold like hotcakes!

The issue traded 541,409 shares in a range of 24.65-78 before closing at 24.70-73, 12×45.

On interesting thing about this issue is that it is non-cumulative. There is no real reason for this; MFC is a holding company. It is, technically, an insurance company – but has no policy holders and is therefore not required to file MCCSR reports with OFSI. There is therefore no real need, from a regulatory perspective, to have this qualify as Tier 1 capital – it appears that the non-cumulativity has been chosen solely to help with the credit ratings; as a precautionary measure in case management ever wants to do something with MFC’s insurance license; and, perhaps, to hoodwink the gullible into believing that there is no difference between the holding company and operating company.

MFC.PR.D has been added to HIMIPref™ and is now part of the Fixed-Reset subindex.

2 Responses to “MFC.PR.D Closes: Big and Soft”

  1. […] PrefBlog Canadian Preferred Shares – Data and Discussion « MFC.PR.D Closes: Big and Soft […]

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