New Issue: MFC Fixed-Resets 6.60%+456

Fresh from denying speculation regardng a common equity raise, Manulife Financial has entered into a bought-deal arrangement to issue Fixed-Resets:

Issue: Non-Cumulative Rate Reset Class A Preferred Shares, Series 4

Size: 8-million shares (=$200-million). Greenshoe for another 3-million shares (=$75-million) exercisable up to two days prior to closing.

Dividends: Fixed rate 6.60% (=$1.65 p.a.) until first Exchange Date; 5-Year Canadas +456bp thereafter, reset every Exchange Date. Floaters pay 3-month bills +456bp, reset quarterly. First Dividend $0.48370 payable 2009-6-19, based on Closing Date.

Exchange: Every Exchange Date to and from Series 5 (“Floaters”).

Exchange Date: June 19, 2014, and every five years thereafter.

Redemption: Every Exchange Data at $25.00. Floaters are also redeemable at $25.50 at all other times.

Closing Date: March 4, 2009

Update: MFC press release.

Update, 2009-2-26: Selling like hotcakes!

Manulife Financial Corporation (“Manulife”) today announced that as a result of strong investor demand for its previously announced Canadian public offering of Non-cumulative 5-Year Rate Reset Class A Preferred Shares, Series 4 (“Series 4 Preferred Shares”), the size of the offering has been increased to 14 million shares. The gross proceeds of the offering will now be $350 million. The offering will be underwritten by a syndicate of investment dealers led by RBC Capital Markets and CIBC World Markets and is anticipated to qualify as Tier 1 capital for Manulife. The expected closing date for the offering is March 4, 2009.

Manulife has also granted the underwriters an option, exercisable in whole or in part at any time up to 48 hours prior to closing, to purchase up to an additional four million Series 4 Preferred Shares. The maximum gross proceeds raised under the offering will be $450 million should this option be exercised in full. Manulife intends to file a prospectus supplement to its March 12, 2007 base shelf prospectus in respect of this issue.

The net proceeds of the offering will be used primarily for general corporate purposes and the balance will be used to reduce the amount outstanding under Manulife’s credit facility with Canadian banks.

4 Responses to “New Issue: MFC Fixed-Resets 6.60%+456”

  1. lystgl says:

    Would you buy these Mr. Hymas?

  2. jiHymas says:

    MFC.PR.C closed today at 15.26 bid to yield 7.40%, with a chance of a capital gain if rates decline. I like them better.

  3. […] original size was 8-million shares plus 3-million greenshoe; the thing sold like […]

  4. […] What a difference a quarter makes, eh? This issue closes almost exactly three months after MFC.PR.D closed: same structure, 6.60%+456. […]

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