Manulife Financial Corporation Announces Applicable Dividend Rates for Series 19 and Series 20 Preferred Shares
On February 18, 2025, Manulife Financial Corporation (Manulife) issued a press release announcing the applicable dividend rates for its Non-cumulative Rate Reset Class 1 Shares Series 19 (Series 19 Preferred Shares) and Non-cumulative Floating Rate Class 1 Shares Series 20 (Series 20 Preferred Shares).
Dividend Rates for Series 19 Preferred Shares
The announcement stated that holders of any Series 19 Preferred Shares that remain outstanding after March 19, 2025, will be entitled to receive fixed rate non-cumulative preferential cash dividends on a quarterly basis. The dividend rate for the Series 19 Preferred Shares will be 4.60%.
Dividend Rates for Series 20 Preferred Shares
The dividend rate for the Series 20 Preferred Shares will be determined on a floating rate basis every six months, based on the three-month Treasury Bill Rate plus 2.40%. The next floating rate dividend will be payable on July 15, 2025, and will be calculated based on the three-month Treasury Bill Rate as of April 15, 2025.
Impact on Preferred Shareholders
For holders of Series 19 Preferred Shares, the fixed dividend rate of 4.60% provides a stable and predictable income stream. However, the lack of cumulative dividends means that if dividends are not declared, they are not carried forward to be paid at a later date.
Impact on the World
Manulife’s announcement of dividend rates for its preferred shares may have an impact on the broader financial markets. Preferred shares are often considered a less risky investment compared to common shares, as they offer a fixed dividend rate and priority in the event of a liquidation. The announcement of a stable dividend rate for the Series 19 Preferred Shares may make them an attractive investment option for income-focused investors.
Additionally, the floating rate dividend for the Series 20 Preferred Shares may provide some insulation from inflation, as the dividend rate will adjust based on changes in interest rates. However, it is important to note that the floating rate dividend may also result in lower dividends during periods of low interest rates.
Conclusion
Manulife’s announcement of the applicable dividend rates for its Series 19 and Series 20 Preferred Shares provides valuable information for investors in these securities. For holders of Series 19 Preferred Shares, the fixed dividend rate of 4.60% offers a stable income stream. For Series 20 Preferred Shares, the floating rate dividend provides some insulation from inflation but may result in lower dividends during periods of low interest rates. The announcement may also have an impact on the broader financial markets, making preferred shares an attractive investment option for income-focused investors.
- Manulife Financial Corporation announced dividend rates for Series 19 and Series 20 Preferred Shares
- Series 19 Preferred Shares will have a fixed dividend rate of 4.60%
- Series 20 Preferred Shares will have a floating rate dividend based on the three-month Treasury Bill Rate plus 2.40%
- Impact on preferred shareholders: stable income stream for Series 19, insulation from inflation for Series 20
- Impact on the world: attractive investment option for income-focused investors
