OREANDA-NEWS. Fitch Ratings expects to assign a rating of 'BBB+' to Sun Life Financial Inc.'s (SLF) C\\$500 million issuance of 2.60% subordinated unsecured debentures due 2025.

KEY RATING DRIVERS

This new issue is rated equivalent to the ratings of SLF's existing subordinated unsecured debt. The proceeds will be used to partially fund the acquisition of the employee benefits business of Assurant, Inc. and may also be used for general corporate purposes, which may include investments in subsidiaries.

SLF's financial leverage was 12.5% at June 30, 2015. Proforma leverage including the additional debt is 14.4%, which remains within Fitch's expectations for the rating category.

Fitch reviewed the ratings of SLF and its insurance operating subsidiaries on Aug. 19, 2015.

RATING SENSITIVITIES

The key rating triggers that could result in an upgrade include:

--Consistent maintenance of fixed-charge coverage, excluding the net impact of market factors, of over 10x;
--Continued improvement in profitability on an underlying and reported basis;
--Stable to improving balance sheet fundamentals.

The key rating triggers that could result in a downgrade include:

--A decline in fixed-charge coverage, excluding the net impact of market factors, to below 6x;
--A sustained drop in the company's risk-adjusted capital position, including the MCCSR ratio falling below 200%;
--An increase in financial leverage to over 25% or an increase in total leverage to over 35%;
--A large acquisition that involves execution and integration risk or impacts the company's leverage and capitalization.

FULL LIST OF RATING ACTIONS

Fitch expects to assign the following rating:

--2.60% subordinated debentures due 2025 'BBB+'.

Fitch currently rates the SLF entities as follows:

Sun Life Financial, Inc.
--Issuer Default Rating (IDR) 'A';
--4.8% senior notes due 2035 'A-';
--4.95% senior notes due 2036 'A-';
--5.7% senior notes due 2019 'A-';
--4.57% senior notes due 2021 'A-';
--5.4% subordinated debentures due 2042 'BBB+';
--5.59% subordinated debentures due 2023 'BBB+';
--2.77% subordinated debentures due 2024 'BBB+';
--4.38% subordinated debentures due 2022 'BBB+';
--4.75% noncumulative preferred shares, series 1, 'BBB-';
--4.8% noncumulative preferred shares, series 2, 'BBB-';
--4.45% noncumulative preferred shares, series 3, 'BBB-';
--4.45% noncumulative preferred shares, series 4, 'BBB-';
--4.5% noncumulative preferred shares, series 5, 'BBB-';
--2.275% noncumulative preference shares series 8R, 'BBB-';
--2.075% noncumulative preference shares series 9QR, 'BBB-';
--3.9% noncumulative preference shares series 10R, 'BBB-';
--4.25% noncumulative preference shares series 12R 'BBB-'.

Sun Life Assurance Co. of Canada
--IFS ratings 'AA-';
--IDR 'A+';
--6.30% subordinated notes due 2028 'A'.

Sun Canada Financial Company
--7.25% subordinated notes due 2015 'A'.

Sun Life Capital Trust
--Sun Life ExchangEable Capital Securities (SLEECS), 7.093% series B, 'A-';
--Sun Life ExchangEable Capital Securities (SLEECS), 5.863% Series 2009-1, 'A-'.

The Rating Outlook is Stable.