Manulife says minimum not met for conversion of series 11 shares

By Mary-Katherine Stinson

Lexington, Ky., March 7 – Manulife Financial Corp. announced the holders of its currently outstanding 8 million non-cumulative rate reset class 1 series 11 shares are not entitled to convert their shares on a one-for-one basis into non-cumulative floating rate class 1 series 12 shares of Manulife, according to a 6-K filing with the Securities and Exchange Commission.

Manulife announced that shareholders of 117,415 series 11 preferred shares elected for conversion as of the March 6 deadline which did not meet the minimum 1 million shares required.

Shareholders are entitled to receive fixed-rate non-cumulative preferential cash dividends on a quarterly basis as and when declared by the Manulife’s board of directors and subject to the provisions of the Canadian Insurance Companies Act.

As announced by Manulife on Feb. 21, the applicable dividend rate for the series 11 preferreds for the five-year period beginning March 20 will be based on the five-year Canadian government bond yield plus 261 basis points. Specifically, the rate from March 20 to March 19, 2028 will be 6.159% per annum, or C$0.384938 per share per quarter.

Manulife may redeem the series 11 shares, in whole or in part, on March 19, 2028 and on Sept. 19 every five years after.

The conversion right was triggered by the company’s announcement on Jan. 31 that it did not intend to redeem any of the currently outstanding shares. The offer was subject to the following minimums: if determined after March 6 that there would be less than 1 million series 11 shares outstanding on March 19 then all series 11 shares would have automatically been converted and alternatively if there would be less than 1 million series 12 shares outstanding on the same date then no series 11 shares will be converted.

Manulife is a Toronto-based financial services group.

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