Calgary Herald

Manulife Financial makes dash for cash to guard against Q2 pandemic rut

- ESTEBAN DUARTE

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,” she said.

“But it is all quite opportunis­tic because it is not on a need-to basis but a want-to basis.”

 ?? PETER J THOMPSON ?? Manulife Financial Corp. has been raising billions of dollars though bonds as it strengthen­s its capital and liquidity position.
PETER J THOMPSON Manulife Financial Corp. has been raising billions of dollars though bonds as it strengthen­s its capital and liquidity position.

Newspapers in English

Newspapers from Canada