Standard & Poor’s has announced:
- •Sun Life Financial Inc.’s (SLF) operating performance improved in 2012. Fixed-charge coverage is now at levels we expect for the ratings.
- •We are affirming all ratings and revising the outlook on SLF to stable from negative. The outlook on core operations remains stable.
- •The stable outlook reflects our view that SLF is well positioned to weather a wide range of potential adverse economic environments.
Standard & Poor’s Ratings Services said today that it revised its outlook on Sun Life Financial Inc. (SLF) to stable from negative. We also affirmed all our ratings on SLF, including the ‘A/A-1’ counterparty credit rating.
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“The change to a stable outlook on SLF is driven primarily by the improvement in Sun Life’s after-tax net operating income to $1.679 billion in 2012,” said Standard & Poor’s credit analyst Robert Hafner. Operating results now support a fixed-charge coverage ratio of more than 5x. As of year-end 2012, SLF’s fixed-charge coverage ratio was 5.7x and its total financial leverage ratio was 29.4%. Sun Life continues to reduce its earnings and capital sensitivity to equity market and interest rate changes, thereby improving earnings stability. When completed, the pending sale of SLFUS will further reduce earnings and capital sensitivity.
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The stable outlook on SLF and its core subsidiaries reflects our view that Sun Life is well positioned to weather a wide range of potential adverse economic environments. We expect Sun Life’s consolidated pretax operating earnings to continue to improve in the intermediate term and to exceed $1.5 billion in 2013, which is necessary to support expected coverage levels of more than 5x at SLF. We believe that Sun Life’s competitive advantages will enable it to continue to expand its market share profitably in many of its chosen markets.
We expect asset-quality issues to be less severe than for many North American peers. If the proportion of nonprotection business increases, the quality of earnings would decline, even while the quantity of earnings increases.
This follows the S&P announcement in February, 2012, that:
» The negative outlook on holding company Sun Life Financial Inc. reflects that fixed charge coverage may not rebound to the levels we expect in 2012.
SLF has the following preferred shares outstanding: SLF.PR.A, SLF.PR.B, SLF.PR.C, SLF.PR.D and SLF.PR.E (DeemedRetractible) and SLF.PR.F, SLF.PR.G, SLF.PR.H and SLF.PR.I (FixedReset). All are tracked by HIMIPref™ and assigned to their respective indices.
S&P rates all the preferreds as P-2(high). DBRS downgraded SLF to Pfd-2(high) in February 2013. Moody’s has them at Baa3(hyb), Review Positive.
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SLF: S&P Affirms Rating, Sets Outlook To Stable
Standard & Poor’s has announced:
This follows the S&P announcement in February, 2012, that:
SLF has the following preferred shares outstanding: SLF.PR.A, SLF.PR.B, SLF.PR.C, SLF.PR.D and SLF.PR.E (DeemedRetractible) and SLF.PR.F, SLF.PR.G, SLF.PR.H and SLF.PR.I (FixedReset). All are tracked by HIMIPref™ and assigned to their respective indices.
S&P rates all the preferreds as P-2(high). DBRS downgraded SLF to Pfd-2(high) in February 2013. Moody’s has them at Baa3(hyb), Review Positive.
This entry was posted on Monday, April 1st, 2013 at 6:48 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.