Manulife Financial Announces Subordinated Debenture Issue

Toronto–(PHStocks)–The Manufacturers Life Insurance Company (MLI), the Canadian insurance company subsidiary of Manulife Financial Corp. (PSE: MFC), intends to issue $500 million principal amount of 4.165% fixed/floating subordinated debentures due 1 June 2022. MLI intends to file a prospectus supplement to its November 11, 2011 base shelf prospectus in respect of this issue.

“Our capital raising activity takes into account our expected refinancing requirements and recognizes that, while our capital position remains strong, there could be pressure on our common share price and bond spreads if our capital ratios decline. We see this action as prudent when faced with uncertain market and economic conditions,” said Donald Guloien, President and CEO of Manulife.

The Debentures will bear interest at a fixed rate of 4.165% per cent for five years and thereafter at a rate of 2.45 per cent over the three month CDOR. The Debentures mature on June 1, 2022.

Subject to prior regulatory approval, MLI may redeem the Debentures, in whole or in part, on or after June 1, 2017 at a redemption price equal to par, together with accrued and unpaid interest to the date fixed for redemption.

The Debentures will constitute subordinated indebtedness, ranking equally and rateably with all other subordinated indebtedness of MLI from time to time issued and outstanding. The Debentures will be fully and unconditionally guaranteed on a subordinated basis by Manulife Financial Corporation, as to payment of principal, premium, if any, interest and redemption price, if any.

The offering is being done on a best efforts agency basis by a syndicate co-led by RBC Capital Markets and BMO Capital Markets and consisting of  CIBC World Markets, Scotia Capital, TD Securities, Bank of America Merrill Lynch, National Bank Financial, HSBC Securities (Canada), Desjardins Securities, Laurentian Bank Securities, Canaccord Capital and Manulife Securities. The offering is expected to close on 17 February 2012.

The net proceeds from the offering will be utilized for general corporate purposes.

The debentures have not been and will not be registered in the United States under the United States Securities Act of 1933, as amended (the Securities Act), or the securities laws of any state of the United States and may not be offered, sold or delivered, directly or indirectly in the United States or to, or for the account or benefit of, a “U.S. person” (as defined in Regulation S under the Securities Act) absent registration or an applicable exemption from such registration requirements.

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