S&P Rates Sun Life of Canada Funding's Notes 'AA+'

Business Wire, May 23, 2000

Business Editors

NEW YORK--(BUSINESS WIRE)--Standard & Poor's

May 22, 2000--Standard & Poor's today assigned its double-'A'-plus rating to Sun Life of Canada Funding LLC's (SLCF) $25 million Series 01 Floating Rate notes.

The rating on the notes is based on a funding agreement issued by Sun Life Assurance Co. of Canada (U.S.) (SLCUS) that secures the notes. The rating reflects SLCUS's position as a core subsidiary of Sun Life Assurance Co. of Canada (Sun Life) (double-'A'-plus counterparty credit rating) and Sun Life's financial strength. Sun Life demutualized in March 2000 and became a wholly owned subsidiary of Sun Life Financial Services of Canada Inc.

The notes are the first of a program under which SLCF may issue up to $2 billion in notes secured by funding agreements provided by SLCUS. The notes represent SLCF's entry into the non-U.S. structured guaranteed investment contract market.

Under the terms of this transaction, SLCUS has sold a funding agreement to SLCF that corresponds to the $25 million in notes. SLCF has assigned the funding agreement to a trustee, Citibank, N.A., for the benefit of the noteholders. Payments on the notes are provided by the cash flow of the corresponding funding agreement.

Domiciled in Delaware, SLCUS is the primary U.S. operation of Sun Life and enjoys a strong business position as one of the premier manufacturers and distributors in the variable annuity market. The company established and maintained this position through innovative and flexible product design and a strong distribution network through its affiliate, Massachusetts Financial Services. Co. (MFS). MFS, which sells load funds, has eased SLCUS's entry into a variety of broker/dealer houses and financial institutions, while SLCUS's association with Sun Life provides distribution through financial planners and insurance agents.

SLCF is a limited liability company incorporated under the laws of the Cayman Islands. Standard & Poor's has reviewed the structure of SLCF and determined that it meets Standard & Poor's criteria for special-purpose vehicles and that the trust has been appropriately structured to provide a security interest to the noteholders. Standard & Poor's has also reviewed the structure and documents in conjunction with the development of the issuance.---CreditWire