Manulife in a dash for cash

Manulife Financial Corp., the insurance company operating in 22 markets, has raised more cash by selling bonds in May than in the past three years combined.

The Toronto- based company has sold over $ 3 billion so far this month and is keeping an eye out for more opportunities to sell debt. The bonanza comes as the pandemic prompts even well-capitalized companies to gird for the economic slump.

“I need to think very proactively about managing my funding needs, in general capital and liquidity, and in general over a longer horizon than I normally would,” said Halina von dem Hagen, global treasurer and head of capital management at Manulife. “In this environment, I am actually thinking like 12 months ahead.”

Manulife, whose first quarter core earnings fell 34 per cent to $1.03 billion, sees chances of an even “more challenging” second quarter, chief executive officer Roy Gori said in an interview on May 6.

Manulife Financial raised around $2.8 billion between 2017 and 2019, according to data compiled by Bloomberg. Manulife Bank, which has a separate funding plan, has raised $ 2.25 billion during the three-year period.

Among the transactions priced in recent weeks, Manulife issued $ 2 billion of subordinated bonds in two tranches, the largest loonie- denominated bond for an insurance company. The combined order book was about $ 5.7 billion. The firm also raised $ 700 million of seven- year senior bonds in two separate deals.

Manulife’s bond sales more than doubled the firm’s $ 1.14 billion of existing debt maturing, or having a call option, during the rest of the year. In 2021, Manulife has another $2.2 billion of bonds with call options, which is a factor “we keep in mind,” von dem Hagen said.

The company will continue to look for “opportunities to further strengthen what is already a very strong capital and liquidity position. But it is all quite opportunistic because it is not on a needto basis but a want-to basis.”