Manulife taps overseas markets to diversify funding
TORONTO (Reuters) - A strategy to tap debt markets outside of Canada enabled Manulife (MFC.TO: Quote), the country's largest life insurer, to complete its biggest round of financing for seven years during 2016, its Chief Financial Officer said.
Manulife raised C$5.3 billion ($4.0 billion) through debt and preferred share issues in 2016, its highest level of financing since 2009, raising funds in the United States, Singapore and Taiwan as well as its domestic market.
The company, which has extensive operations in Asia, raised funds through debt markets in the region for the first time ever during the year. It also returned to U.S. debt markets for the first time since 2010.
"We believe it is prudent to diversify our capital market funding," CFO Steve Roder, said in an interview, speaking for the first time about the company's new strategy.
"In light of the high macroeconomic market volatility over the past two years, it is also prudent to have access to multiple markets at any given time," he added.
Roder said the new funding strategy was appropriate since Manulife's earnings are split roughly equally between Canada, the United States and Asia. The company has expanded rapidly in Asia in recent years, attracted by the region's burgeoning middle class.
The funds enabled the company to refinance existing debt, fund deals and strengthen its capital buffer in the face of ongoing market volatility, Roder said.
($1 = 1.3380 Canadian dollars)
(Reporting by Matt Scuffham; Editing by David Gregorio)
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