TEXT-S&P cuts Sun Life Financial subs ratings to 'BBB'
Overview -- Sun Life Financial Inc. (SLF) announced an agreement to sell Sun Life Assurance Co. of Canada (U.S.) (SLUS) and Sun Life Insurance & Annuity Co. of New York (SLNY) to Delaware Life Holdings, a company owned by shareholders of Guggenheim Partners, for $1.35 billion. -- We are lowering our ratings on SLUS and SLNY to 'BBB' from 'BBB+'. We are also revising the outlook to developing from stable. -- The developing outlook reflects the uncertainty we have regarding the new owners' plans for SLUS and SLNY. Rating Action On Dec. 18, 2012, Standard & Poor's Ratings Services lowered its ratings on Sun Life Assurance Co. of Canada (U.S.) (SLUS) and Sun Life Insurance & Annuity Co. of New York (SLNY) to 'BBB' from 'BBB+'. At the same time, we revised the outlook to developing from stable. Our ratings and outlooks on SLF and its other subsidiaries are unaffected by this action. Rationale On Dec. 17, 2012, SLF announced its plan to sell its subsidiaries, SLUS and SLNY, to Delaware Life Holdings for $1.35 billion. The transaction is expected to close by mid-year 2013. The rating downgrade reflects our view of the company's financial strength on a stand-alone basis. We believe SLUS and SLNY have acceptable capitalization and a modest competitive position and business profile stemming from their closed block of life and annuity businesses. Outlook The developing outlook reflects the uncertainty we have regarding the new owners' plans for SLUS and SLNY. After the transaction closes we will meet with management to understand their strategy for operating these companies. We could raise the ratings if the new owners provide suitable explicit support to SLUS and SLNY. We could affirm the ratings if the companies, which are in run off, remain well capitalized with good earnings. We could lower the ratings if capitalization falls below our 'BBB' confidence levels or the earnings profile deteriorates. Related Criteria And Research Use Of CreditWatch And Outlooks, Sept. 14, 2009 Ratings List Downgraded; Ratings Placed On CreditWatch To From Sun Life Assurance Co. of Canada (U.S.) Sun Life Insurance & Annuity Co. of New York Counterparty Credit Rating BBB/Developing/-- BBB+/Stable/-- Financial Strength Rating Local Currency BBB/Developing/-- BBB+/Stable/-- Downgraded To From Sun Life Assurance Co. of Canada (U.S.) Senior Unsecured BBB BBB+ Subordinated BBB- BBB Sun Life Insurance & Annuity Co. of New York Senior Unsecured BBB BBB+ Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
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