Manulife to buy back $1.2B in stock as part of $13B reinsurance deal with Global Atlantic

Manulife Financial Corp.
MFC,
+0.45%
said Monday it agreed to have Global Atlantic reinsure $13 billion of its reserves across four legacy/low return-on-equity blocks. The company plans to buy back $1.2 billion in stock as part of the deal. The blocks include portions of U.S. long-term care (LTC), U.S. structured settlements, and two Japan whole life products. The LTC block represents $6 billion, or 14% of Manulife’s total LTC reserves as of Sept. 30 and marks the largest reinsurance transaction in the LTC space. Manulife said the deal “represents a full risk transfer with significant structural protection, and with a highly experienced counterparty and its partners.” Global Atlantic is backed by KKR & Co. Inc.
KKR,
+1.93%.
Manulife’s stock was down 0.2% in premarket trades.