{"id":41389,"date":"2020-09-23T20:39:39","date_gmt":"2020-09-24T01:39:39","guid":{"rendered":"http:\/\/prefblog.com\/?p=41389"},"modified":"2020-09-23T20:39:39","modified_gmt":"2020-09-24T01:39:39","slug":"mfc-upgraded-to-pfd-2high-by-dbrs","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=41389","title":{"rendered":"MFC Upgraded To Pfd-2(high) By DBRS"},"content":{"rendered":"

DBRS has announced<\/a>:<\/p>\n

DBRS Limited (DBRS Morningstar) upgraded the Issuer Rating and Medium-Term Notes rating of Manulife Financial Corporation (Manulife or the Company) to A (high) from \u201cA,\u201d its Unsecured Subordinated Debentures rating to \u201cA\u201d from A (low), and its Non-Cumulative Preferred Shares rating to Pfd-2 (high) from Pfd-2. In addition, DBRS Morningstar upgraded the Issuer Rating and Financial Strength Rating of The Manufacturers Life Insurance Company (MLI) to AA from AA (low), its Unsecured Subordinated Debentures rating to AA (low) from A (high), and its Non-Cumulative Preferred Shares rating to Pfd-1 from Pfd-1 (low). Concurrently, DBRS Morningstar upgraded the Fixed\/Floating Subordinated Debentures of Manulife Finance (Delaware), L.P. to \u201cA\u201d from A (low). DBRS Morningstar also changed the trend on all ratings to Stable from Positive.<\/p>\n

KEY RATING CONSIDERATIONS
\nThe ratings upgrade reflects the Company\u2019s powerful franchise in Canada, the United States and Asia as well as the execution of a renewed strategic vision that has focused on derisking the legacy insurance portfolio and reducing the volatility of earnings from movements in equity markets and interest rates, while leading its Canadian peers in terms of regulatory capitalization ratios. This derisking of the legacy insurance portfolio has materially improved the risk profile over the past decade. Moreover, we view Manulife\u2019s performance in 2020 as resilient, given the adverse economic impact brought on by the Coronavirus Disease (COVID-19) pandemic globally. The ratings also consider Manulife\u2019s relatively large exposure to guaranteed products in Canada and the United States, which can result in earnings volatility, as well as the additional complexities of operating an international insurance organization.<\/p>\n

RATING DRIVERS
\nGiven Manulife\u2019s recent ratings upgrade, DBRS Morningstar does not see upward ratings pressure over the intermediate term. Over the longer term, if Manulife continues to improve profitability and derisk by further reducing its exposures to product guarantees and long-term care products, while maintaining its capital profile, the ratings would be upgraded.<\/p>\n

Conversely, persistent weaker and volatile profitability combined with a sustained deterioration in financial leverage and coverage ratios would result in a ratings downgrade. An adverse event causing regulatory capital to decline substantially would also result in a ratings downgrade.<\/p>\n

RATING RATIONALE
\nThe Company\u2019s broad and diverse franchise is supported by leading market shares in Canada, the United States, and Asia. The Company also has strong distribution capabilities, a broad product mix, global brand recognition, and management agility, all of which is supported by a solid risk management framework.<\/p>\n

Positively, the Company continues to make improvements in its risk profile, earnings ability, and capitalization levels. Although profitability has weakened in the first half of 2020 because of the initial impact of the pandemic, earnings have remained resilient and in line with relevant peers by achieving a return on equity of 8.2% in the first half of 2020, per DBRS Morningstar\u2019s calculations. Importantly, the Company\u2019s financial leverage has improved to close to 25%, and Senior Management expects to maintain leverage around this level going forward.<\/p>\n

Manulife has been making progress with its focus on growing its Global Wealth and Asset Management and Asian insurance operations, the business lines that provide the highest growth opportunities compared with the more mature insurance markets in North America. Together with the focus on expense management and a reduction of the impact of equity and interest rates volatility on the bottom line, these strategies have allowed Manulife to improve profitability in recent years.<\/p><\/blockquote>\n

Affected issues are MFC.PR.B, MFC.PR.C, MFC.PR.F, MFC.PR.G, MFC.PR.H, MFC.PR.I, MFC.PR.J, MFC.PR.K, MFC.PR.L, MFC.PR.M, MFC.PR.N, MFC.PR.O, MFC.PR.P, MFC.PR.Q and MFC.PR.R.<\/p>\n","protected":false},"excerpt":{"rendered":"

DBRS has announced: DBRS Limited (DBRS Morningstar) upgraded the Issuer Rating and Medium-Term Notes rating of Manulife Financial Corporation (Manulife or the Company) to A (high) from \u201cA,\u201d its Unsecured Subordinated Debentures rating to \u201cA\u201d …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-41389","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/41389","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=41389"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/41389\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41389"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41389"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41389"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}