Fitch Rates Manulife Financial’s Senior Unsecured Notes ‘A-‘
KEY RATING DRIVERS
The rating for the new offering is equivalent to the rating on MFC's existing senior debt. Proceeds from the issuance will be used for general corporate purposes. Fitch expects pro forma financial leverage following the senior note issuance along with the
Fitch affirmed the ratings of MFC and its insurance operating subsidiaries with a Stable Outlook on
RATING SENSITIVITIES
Key rating triggers for MFC that could lead to a downgrade include:
--Decline in core earnings;
--Elevated charges for actuarial methods and assumptions or experience losses;
--Fixed-charge coverage on a core earnings basis below 6x;
--An increase in financial leverage to over 25% or an increase in total leverage to over 35%;
--A sustained drop in MFC's risk-adjusted capital position with no plans or ability to rectify. This would include the minimum continuing capital and surplus requirement (MCCSR) ratio falling below 200%. The ratings on the
--Large acquisitions that are outside the company's historical risk preference or that have a material impact on the company's leverage and capitalization.
Key ratings triggers for MFC that could lead to an upgrade include:
--Improvement in return on equity (ROE) based on core earnings to 12% or higher;
--Stability in reported net income;
--An increase in fixed-charge coverage on a core earnings basis to over 10x;
--Maintaining current capital and earnings sensitivity to interest rates and equity markets;
--Maintenance of financial leverage at or below 20%.
FULL LIST OF RATING ACTIONS
Fitch has assigned the following rating:
Manulife Financial Corporation
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Fitch currently rates the MFC entities as follows:
Manulife Financial Corporation
--Long-term IDR at 'A';
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The
--Insurer Financial Strength (IFS) at 'AA-';
--IDR at 'A+';
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The
--IDR at 'A';
--Short-term IDR at 'F1';
--Commercial paper at 'F1'.
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Manulife Financial Capital Trust II
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--Insurer Financial Strength (IFS) at 'AA-';
--IDR at 'A+';
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--IFS at 'AA-'.
--IFS at 'AA-'.
Date of Relevant Rating Committee:
Additional information is available on www.fitchratings.com
Applicable Criteria
Insurance Rating Methodology - Effective
https://www.fitchratings.com/site/re/881564
Additional Disclosures
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1015570
Endorsement Policy
https://www.fitchratings.com/regulatory
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Copyright (c) 2016 by Fitch Ratings, Inc.,
The information in this report is provided "as is" without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from
For
View source version on businesswire.com: http://www.businesswire.com/news/home/20161130006108/en/
Fitch Ratings, Media Relations
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Email: [email protected]
or
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Director
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or
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or
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Source: Fitch Ratings
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