PrefBlog

Standard & Poors has announced:

it lowered its ratings on Toronto-based Manulife Financial Corp. (TSX: MFC; Manulife Financial) and all of its rated operating companies by one notch.
…
All of these operating insurance companies now have long-term counterparty credit and financial strength ratings of ‘AA+’. The counterparty credit rating on Manulife Financial is ‘AA-‘. The outlook is stable.

“In our opinion, the downgrade reflects the decline and ongoing volatility of the global equity markets, the resultant impact on earnings, reserves, capital and financial leverage, and the company’s reduced level of financial flexibility,” said Standard & Poor’s credit analyst Donald Chu. Currently, equity markets are down almost halfway from their peak in the major markets where Manulife competes. While we believe that Manulife Financial has done relatively well managing itself through an equity market tail event, we believe the increased earnings and capital volatility are not consistent with the previous ‘AAA’ rating.

The previous mention of these issues on PrefBlog was on Dec. 2, 2008, when S&P affirmed the ratings with a negative outlook. MFC’s 4Q08 Results were briefly reported on PrefBlog.

All three issues are tracked by HIMIPref™. MFC.PR.A is a member of the OperatingRetractible sub-index; MFC.PR.B & MFC.PR.C are members of the PerpetualDiscount index.

This entry was posted on Tuesday, February 24th, 2009 at 4:33 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.