* Cuts debt ratings on uncertain U.S. earnings
* Insurer's stock hit six-month high Monday
TORONTO Dec 13 Standard & Poor's Ratings
Services has cut ratings on Manulife Financial (MFC.TO) debt,
citing concern about the Canadian-based insurer's U.S. earnings
potential and capital risks.
U.S.-based S&P said on Monday it was lowering its
counterparty credit and financial strength ratings on the
insurer's insurance operating subsidiaries to "AA-" from "AA"
and cutting its counterparty credit rating on the parent
company to "A-" from "A".
"We believe that the prospective earnings profile of
Manulife Financial's U.S. operations will be weaker than we
previously expected, given the current economic environment,"
S&P said in a statement.
The agency added that Manulife's equity and interest rate
risk, while declining, still remains high relative to its
Manulife has recorded losses over the last two quarters due
to weak stock markets and low bond yields, which forced the
insurer to hold more capital to ensure it can meet future
The insurer has been hedging its exposure, and has
benefited of late by rising stocks and rebounding bond yields.
Manulife owns the John Hancock insurance brand in the
The stock hit a six-month high on Monday, and closed down
10 Canadian cents at C$16.79 on the Toronto Stock Exchange. The
downgrade was disclosed after markets closed.
(Reporting by Cameron French; editing by Rob Wilson)