Behind Manulife's historic $600 million green bond issue

first for an insurer in domestic market | May 9, 2018

By Barry Critchley

Manulife Financial made financial history this week when it priced a $600 million offering of green bonds, the first insurer to raise capital in this form in the domestic market.

The insurer, which completed a green bond in the Singapore market late last year, offered $600 million principal amount of 3.317 per cent fixed/floating subordinated debentures due in May 2028.

Eleven firms were in the syndicate that was co-led by RBC Capital Markets, CIBC Capital Markets and TD Securities. The expectation is that the fixed, then floating rate security will be called after five years, or when the fixed-rate period ends.

The net proceeds will be used to finance or refinance, “in part or in full, new and/or existing Eligible Assets as defined in the Manulife Green Bond Framework.”

In a release Manulife said the Framework is aligned with the International Capital Market Association’s Green Bond Principles 2017, “and directs the use of proceeds towards renewable energy, green buildings, sustainably-managed forests, energy efficiency, clean transport, sustainable water management and/or pollution prevention and control.

And to fully ensure that Manulife is really offering a green bond, the financing, which started out with a minimum target of $500 million, comes with a second opinion.

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