A.M. Best Assigns Rating to Sun Life Financial Global Funding lll, L.P.'s Funding Agreement-Backed Securities Program

Business Wire, Sept 19, 2006

OLDWICK, N.J. -- A.M. Best Co. has assigned an issuer credit rating of "aa " to Sun Life Financial Global Funding lll, L.P. (SLGF). A.M. Best has also assigned a debt rating of "aa " to SLGF's $750 million floating rate secured notes, due 2013. The outlook for both ratings is stable. All other ratings remain unchanged.

Through this global medium-term note (GMTN) program, SLGF will issue $750 million in floating rate notes on a private placement basis through multiple tranches. The notes are ultimately secured by one or more funding agreements issued by Sun Life US, which is domiciled under the laws of Delaware. The notes are limited recourse obligations of SLGF. Based on A.M. Best's analysis of the rather complex Funding Agreement-Backed Securities Program (FABS) structure utilized by Sun Life US, the program and notes carry Sun Life US' ICR of "aa ". A.M. Best notes that although there is no Delaware case law upon which to rely--which definitively defines the ranking of funding agreements--A.M. Best expects the funding agreements to rank pari passu with other insurance products issued by Sun Life US in the remote event of liquidation.

Sun Life US is a wholly owned subsidiary of Sun Life Financial Inc. (Sun Life) (NYSE: SLF), a Canadian-based holding company with a top three market position in the Canadian life market, along with strong operations in the U.S. life insurance and financial services market segments.

The ratings reflect Sun Life'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.

Sun Life has maintained strong debt servicing capabilities substantiated by its favorable liquidity position, well diversified investment portfolio and continual growth in operating earnings. Sun Life's earnings are supported by its diverse operations and have been enhanced by expense synergies arising from earlier acquisitions.

Despite overall improved earnings performance, A.M. Best believes Sun Life will remain challenged to significantly improve the operating performance of its U.S. annuity businesses, where spread compression and volatile equity markets have impacted its fixed annuity and equity-based annuity results.

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.> For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit www.ambest.com/lh.> 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.