November 17, 2005 10:05 ET

A.M. Best Assigns Ratings to Sun Life Financial's Senior Debt and Shelf Registration

OLDWICK, N.J.--(CCNMatthews - Nov 17, 2005) -

A.M. Best Co. has assigned a debt rating of "aa-" to Sun Life Financial Inc.'s (SLF) (Toronto, Ontario) proposed CAD 600 million senior unsecured fixed/floating rate securities due 2035. Additionally, A.M. Best has assigned indicative debt ratings of "aa-" to senior unsecured debt, "a+" to subordinated debt and "a" to preferred shares that can be issued from SLF's CAD 3 billion shelf registration. All other ratings remain unchanged. All ratings have a stable outlook.

The proceeds from the senior debt offering will be used for general corporate purposes and will be matched funded.

A.M. Best views SLF's shelf registration as a reasonable means to raise a mix of debt and equity securities over the medium term to fund its general corporate purposes and growth. A.M. Best expects SLF's pro-forma debt-to-capital ratio to remain within acceptable levels for the current ratings.

The ratings reflect SLF'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. Moreover, the company enjoys further diversification through its expanding Asia-based operations.

SLF has strong debt servicing capabilities underpinned by its favorable liquidity posture, high quality investment portfolio and continued growth in operating earnings. SLF's earnings are supported by its diverse operations and have been enhanced from expense synergies arising from earlier acquisitions.

Despite overall improved earnings performance, A.M. Best believes SLF 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 and equity-based wealth management businesses.

The following debt rating has been assigned:

Sun Life Financial Inc.--

-- "aa-" on CAD 600 million Series A senior unsecured fixed/floating debentures, due 2035

The following indicative debt ratings have been assigned to the CAD 3 billion shelf registration:

Sun Life Financial Inc.--

-- "aa-" on senior unsecured debt

-- "a+" on subordinated debt

-- "a" on preferred shares

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit 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 www.ambest.com.

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