TORONTO, March 30 /CNW/ - Manulife Financial Corporation ("MFC"), and its subsidiaries, Manulife Finance Holdings Limited ("MFHL") and The Manufacturers Investment Corporation ("MIC"), jointly announced that, pursuant to the indentures governing MIC's 6.822% Senior Unsecured Notes due May 31, 2011 and MIC's 6.646% Senior Unsecured Notes due November 30, 2011 (together, the "Indentures"), MIC has designated MFHL as successor obligor and MFHL has completed the previously announced assumption of the MIC Notes. In connection with the assumption, the Indentures have been amended accordingly and copies of the Indentures and indentures supplemental thereto are available on SEDAR under the company profile for MFHL.
Pursuant to the assumption and the amendments, MFHL became liable in place of MIC for the payment of all of the Notes and interest payments on the Notes and MIC has been released from all of its obligations. MFHL's payment obligations under the MFHL Notes continue to be guaranteed by MFC on a senior basis (the "MFC-MFHL Guarantees"). Other than the change in primary obligor, the material terms of the MIC Notes are unchanged.
MFHL was incorporated under the Canada Business Corporations Act on October 31, 2006 and is a direct wholly-owned subsidiary of MFC. MFHL is a non-operating holding company. MFHL's head and registered office is located at 200 Bloor Street East, Toronto, Ontario, Canada M4W 1E5. MFHL became a reporting issuer in all of the provinces of Canada upon the closing of the assumption (in Ontario, pursuant to a decision of the Ontario Securities Commission dated March 26, 2010).
After giving effect to the assumption transaction, MFHL has total assets of $432 million and total liabilities of $429 million. MFHL's total assets on a pro forma basis are comprised of $22 million of current assets and $410 million of non-current assets. MFHL's total liabilities on a pro forma basis are comprised of $9 million of current liabilities and $420 million of non-current liabilities. This information is presented on an unconsolidated basis, based on the unaudited pro forma December 31, 2009 financial statements of MFHL, taking into account the March 30, 2010 assumption transaction described above.
MFC, under the MFC-MFHL Guarantees, continues to provide full and unconditional credit support (as defined in National Instrument 41-101 - General Prospectus Requirements) for the MFHL Notes.
For Canadian federal income tax purposes, holders will be considered to have disposed of their MIC Notes for proceeds of disposition equal to the fair market value of the MFHL Notes received on the assumption of the MIC Notes by MFHL, determined at the time of the assumption. For this purpose, the fair market value of the MFHL Notes may be different than the principal amount of the MFHL Notes.
RBC Dominion Securities Inc., Scotia Capital Inc. and BMO Nesbitt Burns Inc. have each prepared a calculation of the fair market value which includes accrued interest on the MIC Notes based on settlement today. The simple average of such fair market value is $1,081.4985 for each $1,000 principal amount in the case of the 6.822% MFHL Notes, and $1,094.4999 for each $1,000 principal amount in the case of the 6.646% MFHL Notes. The fair market value of the MFHL Notes determined by these investment dealers is not binding on the Canada Revenue Agency.
About Manulife Financial
Manulife Financial is a leading Canadian-based financial services group serving millions of customers in 22 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, the Company offers customers a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were Cdn $440 billion (US$420 billion) as at December 31, 2009.
Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com.
SOURCE Manulife Financial Corporation
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