Toronto-based Manulife Financial Corp. is issuing eight million preferred shares to raise $200 million, the company announced on Tuesday.

The non-cumulative Five-Year Rate Reset Class A Preferred Shares, Series 4, will be issued at $25 a share.

The offering will be underwritten by a syndicate of investment dealers, led by RBC Capital Markets and CIBC World Markets, and is anticipated to qualify as Tier 1 capital for Manulife.

The expected closing date for the offering is March 4.

Manulife also granted the underwriters an option to purchase an additional three million shares at the same price, exercisable up to 48 hours prior to closing. If exercised in full, the gross proceeds raised would be $275 million.

Holders of the Series 4 shares will be entitled to receive a non-cumulative quarterly fixed-dividend yielding 6.6% annually, as and when declared by Manulife’s board of directors, for the initial period ending June 19, 2014. The dividend rate will then be reset every five years at a rate equal to the five-year Government of Canada bond yield plus 4.56%.

Shareholders will have the right to convert their shares into Series 5 preferred shares, subject to certain conditions, on June 19, 2014 and on June 19 every five years thereafter. The Series 5 shares will pay non-cumulative quarterly floating dividends, as and when declared by the board of directors, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 4.56%.