Fitch Affirms John Hancock's Rtgs; Revises Outlook to Positive.Business Editors CHICAGO--(BUSINESS WIRE)--Sept. 29, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed the ratings of John Hancock Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. (JHFS JHFS John Hancock Financial Services ) and its subsidiary insurance companies following the announcement by Manufacturers Financial Corp. (Manulife) that it has entered into a transaction to acquire JHFS valued at approximately $10.9 billion. (See below for all affected ratings.) The Rating Outlook has been revised to Positive from Stable. The rating action affects approximately $1.4 billion of debt outstanding. Under the terms of the proposed transaction, JHFS would become a wholly-owned subsidiary of Manulife and would be purchased with a 100% share exchange priced at $37.60 per share. As a part of the transaction, Manulife expects to repurchase approximately C$2.5 to C$3.0 billion of common shares outstanding. The transaction is expected to close by the second quarter of 2004 subject to regulatory approval and approval by JHFS shareholders. Rationale for the Positive Outlook on JHFS's insurer financial strength and fixed income ratings is based upon Fitch's view that JHFS will be a core operation of Manulife and will ultimately be managed within Fitch's parameters for Manulife's 'AA+' insurer financial strength rating. Being part of a higher rated entity will allow JHFS to more quickly achieve its goals of rebalancing Rebalancing The process of realigning the weightings of one's portfolio of assets. Notes: For example, if your portfolio's proportion of stock has grown too large for your intended assets weightings and risk tolerance, you might rebalance by selling some stock and putting its risk profile, while maintaining growth and diversified earnings streams. Manulife also brings to JHFS incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. scale in Canada and Asia, business line diversification and enhanced and new product capabilities in the U.S. Still, Fitch believes that with any acquisition there is integration and execution risks placing uncertainty on the realization of expected expense saving and revenue synergies. JHFS' management, which does not have a long track record with acquisitions, is expected to drive the integration of U.S. operations. Therefore, Fitch will monitor closely the achievement of integration targets as well as capitalization levels and other balance sheet exposures Balance sheet exposure See: Accounting exposure. at JHFS. Ratings Affirmed ratings: John Hancock Life Insurance Co. -- Insurer financial strength ratings 'AA'/Positive Outlook; -- Long-term issuer 'AA-'/ Positive Outlook; -- Surplus notes 'A+'/Positive Outlook. John Hancock Variable Life Ins. Co. -- Insurer financial strength ratings'AA'/Positive Outlook. Investors Partners Life Ins. Co. -- Insurer financial strength ratings'AA'/Positive Outlook. John Hancock Global Funding II -- Global MTN MTN A short-form for Medium Term Note. MTN Medium term notes issued by corporations, much like shorter-term commercial paper. MTN See medium-term note (MTN). program rating 'AA'/Positive Outlook. John Hancock Financial Services -- Commercial paper program rating'F1'. John Hancock Financial Services -- Long-term issuer rating 'A+'/Positive Outlook; -- Senior debt 'A+'/Positive Outlook. Maritime Life The Maritime Life Assurance Company was a Canadian insurance company based in Halifax, Nova Scotia. It was founded in 1922 and in 2004 it became fully integrated with Manulife Financial, with the Maritime Life brand being retired. In 2004 it employed 2700 employees. Assurance of Canada (John Hancock Financial Services guarantor guarantor n. a person or entity that agrees to be responsible for another's debt or performance under a contract, if the other fails to pay or perform. (See: guarantee) GUARANTOR, contracts. He who makes a guaranty. 2. ) -- Long-term issuer rating 'A+'/Positive Outlook. |
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