Fitch Affs Ratings Of Sun Life Assurance Company Of Canada.

Business Editors

CHICAGO--(BUSINESS WIRE)--May 3, 2001

Fitch has affirmed the 'AAA' financial strength ratings of Sun Life Assurance Company of Canada (Sun Life) and its two subsidiaries and Sun Life's 'AA' fixed income ratings. The rating action follows today's announcement that Sun Life Financial Services of Canada (SLC) has agreed to acquire Keyport Life Insurance Company (Keyport Life) and Independent Financial Marketing Group (IFMG) from Liberty Financial Companies, Inc. (Liberty) in a transaction valued at C$2.6 billion.

The Rating Outlook for all ratings has been moved to Stable from Negative based upon Sun Life's favorable operating performance in 2000 relative to Fitch's rating expectations and not as a result of the Keyport Life acquisition.

Fitch views the Keyport Life transaction as a major part of Sun Life's recently announced aggressive growth strategy in the North American protection and wealth management businesses and an appropriate deployment of excess capital. Expected positive benefits of the transaction for Sun Life include increased scale and competitive positions in the U.S. wealth management markets, improved product balance and broadening of the company's distribution channels through IFMG. Fitch believes key acquisition risks include increased levels of financial leverage, Keyport Life's greater exposure to below investment grade securities and the uncertainty of integration risks associated with Sun Life's first major acquisition in some time.

The 'AAA' insurer financial strength rating is based on the very strong combined capital position, diversified revenue and distribution channels operating in Canada, the U.S., the U.K., and Asia and strong overall earnings capacity. Sun Life also continues to benefit from very strong asset quality and liquidity, and the value represented in the company's investment in MFS Investment Management (MFS), a leading U.S. mutual fund operation.

Fitch views as offsetting factors Sun Life's increased exposure to the wealth management business and the inherent income volatility based on capital market performance and the impact on assets under management. Additionally, Fitch notes increased competition from both inside and outside the industry facing companies within the North American wealth management markets and the mature Canadian insurance market in which Sun Life is a major player. Sun Life's expense ratios and debt leverage are among the highest of the major Canadian life insurance companies.

Sun Life is a diversified, international insurance and financial services company reporting total assets under management C$316 billion as of March 31, 2001. Total revenue and asset growth has been strong, although the company's wealth management business has not been immune from recent equity market volatility. Sun Life's earnings recovered strongly in 2000, and Fitch believes that while 2001 earnings comparisons may be strained by the impact of weaker equity markets upon assets under management and resulting fee income, asset quality will remain high, and risk-based capital levels are expected to remain solid.

Entity/Issue/Type                   Action        Rating

Sun Life Assurance of Co. of Canada
--Insurer financial strength        Affirmed      'AAA';
Rating Outlook moved to Stable.

Sun Life Assurance of Co. of Canada (U.S.)
--Insurer financial strength        Affirmed      'AAA';
Rating Outlook moved to Stable.

Sun Life Insurance & Annuity of Co. NY
--Insurer financial strength        Affirmed      'AAA';
Rating Outlook moved to Stable.

Sun Canada Financial Co.
---Subordinated debt rating          Affirmed      'AA';
Rating Outlook moved to Stable.

Sun Life of Canada (US) Capital Trust I
--Cumulative capital securities     Affirmed       'AA';
Rating Outlook moved to Stable.