Manulife Financial (MFC) Announces $2.5B Common Offering
Manulife Financial Corporation (MFC) today announced that it will issue $2,500,400,000 in common equity in a bought deal arranged by Scotia Capital Inc. and RBC Dominion Securities Inc. Upon closing, The Manufacturers Life Insurance Company (MLI) will have access to the highest level of capital since it became a public company.
On a pro forma basis after giving effect to the $2.5 billion offering of common equity, if the entire amount of the proceeds of the offering were invested in MLI, and reflecting market conditions as of the end of our third quarter, Manulife estimates that the pro forma Minimum Continuing Capital and Surplus Requirements (MCCSR) ratio of MLI as at September 30, 2009 would have been approximately 256% versus the 229% MCCSR reported at the end of its third quarter. This ratio, on a pro forma basis, would be the highest since MFC became a public company.
A Syndicate of underwriters being led by Scotia Capital Inc. and RBC Dominion Securities Inc. in a bought deal public offering has agreed to buy $2.5 billion in Manulife common shares at a price of $19.00. The public offering is expected to close on or about November 30, 2009, subject to satisfaction of customary closing conditions.
The Company has granted the underwriters an over-allotment option, exercisable in whole or in part at any time up to 30 days after closing, to purchase up to an additional $375,060,000 in common shares at the same offering price. Should the over-allotment option be exercised in full, the total gross proceeds of the offering would be $2,875,460,000.
The estimated net proceeds from the offering will be approximately $2.413 billion, after deducting the underwriting fee and before the estimated offering expenses payable by the Company. The Company expects to use the net proceeds from this offering for general corporate purposes, which may include contributions of capital to its insurance and other subsidiaries, potential acquisitions or other growth initiatives. The Company has not yet made a determination as to how much of the proceeds will be invested in MLI and how much will be used for other corporate purposes. Following the offering, the Company also intends to retire the approximately $1 billion outstanding indebtedness under its Credit Facility with Canadian chartered banks using other cash resources of the Company.
Create E-mail AlertRelated Categories
Equity OfferingsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
