(In fourth paragraph, Fitch corrects amount of unrealized
losses on alternative asset classes to $277 million. In ratings
list, corrects ratings of Manulife Financial Capital Trust to
'A+'.)

(The following statement was released by the rating
agency)

June 12 - Fitch Ratings has downgraded the debt and
preferred stock ratings of Manulife Financial Corporation
(MFC.TO: Quote, Profile, Research) (MFC) by one notch. Fitch also assigns an 'A' rating
to MFC's CAD1 billion 4.896% notes due 2019 and its 7.768%
notes due 2019, and an 'A-' rating to MFC's non-cumulative
preferred class 1, series 1 shares. The Rating Outlook is
Negative.
In addition, Fitch has affirmed all ratings of MFC's insurance
related operating subsidiaries, including Manufacturer's Life
Insurance Company (MLI) and John Hancock Life Insurance Company
(JHLIC). (See complete list of ratings actions at the end of
this release.) The Outlook for all ratings remains Negative.
The one-notch downgrade of MFC's parent company-related ratings
reflects Fitch's decision to move to standard notching of
parent company ratings relative to insurance company subsidiary
ratings. This is primarily as a result of the increased
volatility in earnings and capital of the group, declining
fixed-charge coverage at the holding company level, and a
moderate increase in financial leverage. Earnings before
interest and taxes (EBIT) to fixed charges declined to 2.6
times (x) in 2008, from an average of 13.1x for the previous
three years ending 2008. Fitch considers MFC's payment capacity
to be solid and expects fixed charge coverage in 2009 to range
between 6x and 7x in a generally flat equity market scenario.
MFC reported a first-quarter 2009 CGAAP net loss of $1,068
million, driven by $1,401 million in accounting charges to
strengthen variable annuity and segregated fund guarantee
reserves, $277 million of unrealized losses on alternative
asset classes and accruals for credit downgrades and credit
impairments of $193 million. As a result, shareholders' equity
declined by $1.4 billion, or 15%, in the first three months of
2009.
Fitch's equity-credit-adjusted leverage ratio for MFC increased
to 17.4% on a pro forma basis with the recent issuance of debt
and preferred stock securities from 16% at year-end 2008 and
10.2% the prior year. Fitch notes that MFC's current bank
facility matures in 2013 and has no debt maturities until
2014.
While Fitch views the capitalization of MFC's operating
companies as quite strong at March 31, 2009 when measured by
risked-based capital metrics, these levels are being challenged
due to the recent equity market declines and anticipated
increases in actuarial reserve and capital requirements related
to the large block of unhedged variable annuity guarantees
written before 2008. Fitch does not envision any near-term
liquidity problems as the guarantees are not near-term cash
claims.
Fitch believes MFC has good financial flexibility and a
consistent ability to raise capital to meet potential capital
requirements and/or potential acquisition-related needs at the
new rating levels through the issuance of debt or additional
forms of equity.
The affirmation of MLI and JHLIC and other operating insurance
subsidiaries' ratings reflects MFC's strong business and
operating profiles and the expected strong level of
capitalization in 2009. Additional strengths include MFC's
strong North American market positions as a result of increased
scale, solid operating performance in domestic individual life
insurance, group insurance and retirement, as well as its
profitable international insurance businesses in Asia and
Japan, which have offset in part the earnings declines in
variable annuities and fee-based businesses.
Fitch also believes the strong dividend capacity of MFC's chief
operating subsidiary, MLI, is a key support to MFC-related
payment of fixed charges and common stock dividends in 2009 and
that U.S. insurance operations are less likely to be a
significant source of dividends to the parent company, due to
the need to maintain statutory capital levels in view of
additional potential investment impairments and reserves for
variable annuities.
Fitch's Negative Outlook reflects:
--Fitch's view that near-term conditions in the financial
markets will likely continue for an extended period, which
could cause the company to experience higher-than-expected
volatility in its financial results and additional challenges
in 2009;
--The potential for higher-than-expected credit related
investment losses;
--The potential need to further increase the capital supporting
the company's large, unhedged variable annuity business, driven
by further declines in equity markets.
Fitch rates the following:
Manulife Financial Corporation:
--CAD1,000 million medium-term note 4.896% due June 2, 2014
'A";
--CAD350 million 5.60% non-cumulative, rate reset, preferred
class 1, series 1 'A-';
--CAD600 million 7.768% medium-term note due 2019 'A'.
Fitch has downgraded the following ratings:
Manulife Financial Corporation:
--Issuer Default Rating (IDR) to 'A+' from 'AA-';
--CAD350 million 4.67% due 2013 to 'A' from 'A+';
--CAD550 million 5.161% due 2015 to 'A' from 'A+';
--CAD450 million 5.505% due 2018 to 'A' from 'A+';
--CAD350 million 4.10% class A, series 1, preferred stock to
'A-' from 'A';
--CAD350 million 4.65% class A, series 2, preferred stock to
'A-' from 'A' ;
--CAD300 million 4.50% class A, series 3, preferred stock to
'A-' from 'A'.
--CAD450 million 6.60% non-cumulative, preferred class A,
series 4 to 'A-' from 'A'.
Manulife Finance, L.P.:
--CAD550 million 4.448% fixed/floating senior debentures due
2026 (Manulife Finance Corp. guarantor) 'A' from 'A+';
--CAD650 million 5.059% fixed/floating subordinated debentures
due 2041 (Manulife Finance Corp. guarantor) to 'A-' from 'A'.
John Hancock Financial Services:
--IDR to 'A+' from 'AA-'
--Short-term IDR & commercial paper to 'F1' from 'F1+'.
In addition, Fitch affirms the following ratings:
The Manufacturers Life Insurance Company:
--IFS at 'AA'
--IDR at 'AA-'
--CAD550 million subordinated debt 6.24% due 2016 at 'A'.
John Hancock Life Insurance Company (U.S.A.)
--IFS at 'AA'.
The John Hancock Life Insurance Company of New York
--IFS at 'AA'.
John Hancock Variable Life Ins. Co.
--IFS at 'AA'.
John Hancock Life & Health Insurance Company
--IFS at 'AA'.
Manulife Financial Capital Trust
--CAD60 million 6.7% MaCS series A 'A+';
--CAD940 million 7.0% MaCS series B 'A+'.
John Hancock Life Insurance Co.:
--IDR at 'AA-';
--IFS at 'AA';
--US$450 million surplus notes 7.375% due 2024 at A+'
John Hancock Global Funding Ltd.
--Global MTN program at 'AA'.
John Hancock Global Funding II
--Global MTN program at 'AA'.
Contact: R. Andrew Davidson, CFA, +1-312-368-3144, Doug L.
Meyer, CFA, +1-312-368-2061, or Martha M. Butler, CFA, CLU,
+1-312-368-3191, Chicago.
Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549,
Email: brian.bertsch@fitchratings.com.
(New York Ratings Team; Editing by Kenneth Barry)