MFC.PR.N Firm On Decent Volume

Manulife Financial Corporation has announced:

that it has completed its offering of 10 million Non-cumulative Rate Reset Class 1 Shares Series 19 (the “Series 19 Preferred Shares”) at a price of $25 per share to raise gross proceeds of $250 million.

The offering was underwritten by a syndicate of investment dealers co-led by Scotia Capital Inc., CIBC World Markets and RBC Capital Markets. The Series 19 Preferred Shares commence trading on the Toronto Stock Exchange today under the ticker symbol MFC.PR.N.

The Series 19 Preferred Shares were issued under a prospectus supplement dated November 26, 2014 to Manulife’s short form base shelf prospectus dated June 23, 2014.

MFC.PR.N is a FixedReset, 3.80%+230, announced November 26. It will be tracked by HIMIPref™ and has been assigned to the FixedResets index.

Note that since this is issued by an Insurance Holding Company and is not convertible (or otherwise potentially NVCC-compliant), I have added a DeemedMaturity to the option schedule for analytical purposes, at $25.00 for 2025-1-31.

MFC.PR.N traded 1,163,652 shares today (consolidated exchanges) in a range of 24.95-12 before closing at 25.07-10. Vital statistics are:

Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 25.07
Bid-YTW : 3.72 %

Implied volatility theory suggests that this issue is fairly priced relative to other MFC issues … but remember that the Implied Volatility calculation ignores DeemedMaturities and the calculated volatility is very high!


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