Manulife Financial Corp. intends to issue $1 billion of medium term notes, the banks said Thursday.

The notes will pay a fixed rate of 4.896% until maturity on June 2, 2014. At 4.896%, the notes are priced at a spread of 230 basis points over the five-year Government of Canada Bond, Manulife says.

The net proceeds of the offering will be used primarily to reduce amounts outstanding under Manulife’s credit facility with Canadian chartered banks and the balance of the net proceeds will be used for general corporate purposes, the company says.

The notes will be direct unsecured obligations of Manulife and will rank equally with all other unsecured indebtedness of the company that is not subordinated, Manulife says.

Manulife intends to file in Canada a pricing supplement to its amended and restated short form base shelf prospectus dated May 8, 2009 (amending and restating its March 30, 2009 short form base shelf prospectus) and prospectus supplement dated April 21, 2009 in respect of this issue.

The notes, to be offered on a best efforts basis through an agency syndicate led by RBC Dominion Securities Inc. and CIBC World Markets Inc., are expected to be issued on June 2.

IE