A.M. Best Affirms Sun Life's Financial Strength and Debt Ratings; Assigns Rating To Non-Cumulative Preferred Share Issue.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A++ (Superior) of Sun Life Assurance Company of Canada (Sun Life) (Toronto) and its primary subsidiaries, Sun Life Assurance Company of Canada (U.S.) (Wilmington, DE) and Sun Life Insurance and Annuity Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . Concurrently, A.M. Best has affirmed all of Sun Life's existing debt ratings and its issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "aa+". A.M. Best has also affirmed the ICR of "aa-" of Sun Life Financial Inc's (Sun Life Financial) (Toronto, Canada) and has assigned a debt rating of "a" to its issuance of CAD 300 million Class A Non-Cumulative Preferred Shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. Series 2. All ratings have a stable outlook. (See link below for a complete list of the ratings.) The proceeds from the offering may be used to redeem Sun Life's CAD 150 million preferred share issue on June 30, 2005, and for general corporate purposes. The offering does not significantly increase Sun Financial's leverage or fixed charge coverage, which remain within acceptable ranges for the company's rating. The ratings reflect Sun Life's diversified and profitable operations, favorable risk-adjusted capitalization and very strong market position in all major business segments in Canada, complemented by growth outside of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Sun Life has strong debt servicing capabilities underpinned by its favorable liquidity posture, high quality investment portfolio and continued growth in operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before . Sun Life's earnings are supported by its diverse operations and have been enhanced from expense synergies arising from earlier acquisitions. Operating earnings are anchored by its very strong franchise in the Canadian market, along with a favorable position Noun 1. favorable position - the quality of being at a competitive advantage favourable position, superiority advantage, vantage - the quality of having a superior or more favorable position; "the experience gave him the advantage over me" in the U.S. annuity area. Accordingly, Sun Life enjoys a good balance between its wealth management and protection business, along with a reduced historical reliance on earnings from its mutual fund operation, Massachusetts Financial Services Company (MFS MFS Medicare fee schedule ), which has experienced volatility in recent years. Despite overall improved earnings performance, A.M. Best believes Sun Life will remain challenged to significantly improve the operating performance of its U.S. wealth management businesses, where spread compression and volatile equity markets have impacted its fixed annuity Fixed Annuity An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal. and equity-based wealth management businesses. In addition, the future earnings contribution from international businesses may be subject to uncertainty reflecting a number of risks inherent in emerging economies. A.M Best has also affirmed the FSR of A+ (Superior) of Independence Life and Annuity Company (Lincoln, RI), a Sun Life subsidiary. For a complete list of Sun Life Assurance Company of Canada's financial strength and debt ratings, please visit http://www.ambest.com/press/063003sunlife.pdf. For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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