A.M. Best Co. has assigned a debt rating of “a-” to the issuance of CAD 500 million 7.90% fixed/floating subordinated unsecured debentures, due 2019 of Sun Life Financial Inc. (Sun Life) (Toronto, Ontario) [NYSE/TSX: SLF]. The outlook for the rating is stable.
The proceeds from the debentures are expected to be used for general corporate purposes including investments in subsidiaries, thereby, bolstering its liquidity position. Sun Life’s financial leverage and interest coverage remain within A.M. Best’s expectations for the current rating.
The rating of Sun Life reflects its diversified revenue stream from multiple regions, profitable operations in Canada, favorable risk-adjusted capitalization and well-developed and fully integrated risk management framework. The company’s year-end regulatory capital ratio in Canada is considered strong. SLF is a Canadian-based holding company with a top three market position in the Canadian insurance market. Sun Life also maintains an expanding wealth management and life insurance operation in Asia.
A.M. Best expects Sun Life to continue facing challenges due to stresses in the global macroeconomic environment, especially in its U.S. operations. The prolonged weakness in the equity markets through first quarter 2009 is expected to negatively impact both Sun Life’s insurance operations and its asset management operation, Mclean Budden and MFS.
All existing Sun Life ratings are unaffected. For additional information on the company’s current ratings, please see A.M. Best’s press release of February 27, 2009.
For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
Marc Steinberg, 908-439-2200, ext. 5225
William Pargeans, 908-439-2200, ext. 5359
Jim Peavy, 908-439-2200, ext. 5644
Rachelle Morrow, 908-439-2200, ext. 5378