Manulife Financial Prices Senior Notes worth $1.75 Billion

Manulife Financial Corporation MFC has made a public offering of two series of senior notes aggregating $1.75 billion. The offering consists of 4.150% $1 billion senior notes and 5.375% $750 million senior notes, scheduled to mature in 2026 and 2046, respectively.

Manulife Financial has offered the 4.150% senior notes at 99.757% of face value and 5.375% senior notes at 99.645% of face value.

The company plans to deploy the net proceeds from the offering for general corporate purposes including future refinancing requirements.

Manulife Financial displays its prudence by issuing senior notes amid a low interest rate environment to procure funds. By capitalizing on the low interest rate environment, the company is consciously making efforts to reduce the interest burden, thereby facilitating margin expansion. Also, a sustained operational strength will enable the company to service debt uninterruptedly, thereby maintaining its creditworthiness.   

As of Dec 31, 2015, the long-term debt of the company was $1.9 billion, compared with $3.9 billion at the end of 2014. This reflects a decline of 52.3%. The debt-to-equity ratio at year-end 2015 was 4.5%, down from 11.7% at the end 2014. However, the latest offering will increase the debt-to-capital ratio by another 434 basis points.  

Zacks Rank and Stocks to Consider

Currently, Manulife Financial carries a Zacks Rank #4 (Sell). Some better-ranked stocks from the same sector are ING Groep N.V. ING, Chubb Limited CB and The Hanover Insurance Group, Inc. THG. Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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