Manulife taps Asia debt market for first time with Singapore sale

Manulife Centre at Bras Basah Road.
Manulife Centre at Bras Basah Road. PHOTO: CDL

TORONTO (BLOOMBERG) - Manulife Financial Corp is tapping the Asian capital markets for the first time as it seeks to broaden its funding sources and investor base.

Canada's largest life insurer issued S$500 million of subordinated debt in Singapore with a 3.85 per cent coupon due in 2026, the company said in a statement on Tuesday (May 17). The notes have a fixed rate until May 25, 2021, when they will convert to rate of 1.97 per cent over the prevailing five-year Singapore dollar swap rate. The notes are callable after May 25, 2021.

S&P Global Ratings assigned an A- rating to the debt.

"This issuance marks our first debt transaction in Asian capital markets, and further supports our branding and banking partnerships in the region," chief financial officer Steve Roder said in the statement. "This transaction is an important part of our global strategy to diversify funding sources and to broaden our investor base."

The offering marks Manulife's latest foray into Singapore, one of its fastest growing operations, according to the company. It recently announced it is seeking up to US$470 million in a second attempt at a initial public offering of its US properties in the Singapore.

DBS Bank and Standard Chartered have been appointed as joint lead managers, and Australia & New Zealand Banking Group is a co-manager of the bond offering. Proceeds from the deal, expected to close May 25, will be used for general corporate purposes, the company said.