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TMCNet:  A.M. Best Assigns Debt Rating to The Manufacturers Life Insurance Company's New Subordinated Debt Offering

[December 03, 2013]

A.M. Best Assigns Debt Rating to The Manufacturers Life Insurance Company's New Subordinated Debt Offering

OLDWICK, N.J. --(Business Wire)--

A.M. Best Co. has assigned a debt rating of "a" to the recently issued CAD 250 million, 2.926% aggregate principal fixed/floating subordinated debentures due November 29, 2023 of The Manufacturers Life Insurance Company (MLI) (domiciled in Toronto, Canada). The outlook assigned is stable.

The proceeds from the offering will be utilized for general corporate purposes including future refinancing requirements. MLI may redeem the debentures on or after November 29, 2018. The debentures are fully and unconditionally guaranteed on a subordinated basis by the holding company, Manulife Financial Corporation (MFC). With the issuance of these subordinated debentures, A.M. Best notes that MFC's existing financial leverage remains temporarily elevated but is expected to decline following debt maturities in 2014. Despite the new issuance, MFC's financial leverage has been decreasing and remains wthin the range that supports its current ratings.


MFC has reported increased International Financial Reporting Standards earnings in the third quarter 2013 of CAD 1,001 million, due to strong core earnings and strong investment related experience, which is partially offset by charges due to changes in actuarial assumptions. Mutual fund assets have grown as MFC focuses its growth on higher return on equity, lower risk business. Despite the increased use of hedging to mitigate earnings volatility, A.M. Best will continue to monitor the large book of interest and equity market sensitive in-force business.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


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