Sun Life Financial Inc. has announced:
the applicable dividend rates for its Class A Non-Cumulative Rate Reset Preferred Shares Series 8R (the “Series 8R Shares”) and Class A Non-Cumulative Floating Rate Preferred Shares Series 9QR (the “Series 9QR Shares”).
With respect to any Series 8R Shares that remain outstanding after June 30, 2025, commencing as of such date, holders thereof will be entitled to receive non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of Sun Life and subject to the Insurance Companies Act (Canada). The dividend rate for the five-year period commencing on June 30, 2025 to but excluding June 30, 2030 will be 4.230% per annum or $0.264375 per share per quarter, being equal to the sum of the Government of Canada Yield, as defined in the terms of the Series 8R Shares, on Friday, May 30, 2025 plus 1.41%, as determined in accordance with the terms of the Series 8R Shares.
With respect to any Series 9QR Shares that remain outstanding after June 30, 2025, holders thereof will be entitled to receive floating rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of Sun Life and subject to the Insurance Companies Act (Canada), based on a dividend rate equal to the sum of the T-Bill Rate, as defined in the terms of the Series 9QR Shares, plus 1.41% (calculated on the basis of the actual number of days elapsed in such Quarterly Floating Rate Period divided by 365 days), subject to certain adjustments in accordance with the terms of the Series 9QR Shares. The dividend rate for the period commencing on June 30, 2025 to but excluding September 30, 2025 will be equal to 4.054% per annum or $0.255458 per share per share, as determined in accordance with the terms of the Series 9QR Shares.
Beneficial owners of Series 8R Shares and Series 9QR Shares who wish to exercise their right of conversion should communicate as soon as possible with their broker or other nominee and ensure that they follow their instructions in order to meet the deadline to exercise such right, which is 5:00 p.m. (ET) on Monday, June 16, 2025.
They later announced:
that 1,400 of its 6,217,331 Class A Non-cumulative Rate Reset Preferred Shares Series 8R (the “Series 8R Shares”) have been elected for conversion on June 30, 2025, on a one-for-one basis, into Class A Non-cumulative Floating Rate Preferred Shares Series 9QR (the “Series 9QR Shares”), and 2,664,916 of its 4,982,669 Series 9QR Shares have been elected for conversion on June 30, 2025 on a one-for-one basis into Series 8R Shares. Consequently, on June 30, 2025, Sun Life will have 8,880,847 Series 8R Shares and 2,319,153 Series 9QR Shares issued and outstanding. The Series 8R Shares and Series 9QR Shares will be listed on the Toronto Stock Exchange under the symbols SLF.PR.G and SLF.PR.J, respectively.
Subject to regulatory approval, Sun Life may redeem all or any part of the outstanding Series 8R Shares, at Sun Life’s option, by the payment of an amount in cash for each share so redeemed of $25.00, together with all declared and unpaid dividends to the date fixed for redemption, on June 30, 2030 and on June 30 every five years thereafter. Subject to regulatory approval, Sun Life may redeem all or any part of the then outstanding Series 9QR Shares, at Sun Life’s option, by the payment of an amount in cash for each share so redeemed of (i) $25.00, together with all declared and unpaid dividends to the date fixed for redemption in the case of redemptions on June 30, 2030 and on June 30 every five years thereafter, or (ii) $25.50, together with all declared and unpaid dividends to the date fixed for redemption in the case of redemptions on any other date.
So that’s a 24% net conversion into the FixedReset, SLF.PR.G, leaving the the SLF.PR.G/SLF.PR.J split at 79%/21%.
SLF.PR.G was issued as a FixedReset, 4.35%+141, announced 2010-5-13 and commenced trading 2010-5-25. It reset to 2.275% effective 2015-6-30, which triggered a 50% conversion to the FloatingReset SLF.PR.J. I recommended against conversion. SLF.PR.G reset to 1.825% effective 2020-6-30 and there was a 9% net conversion to SLF.PR.G. The issue is tracked by HIMIPref™ and is assigned to the FixedReset (Discount) subindex.
SLF.PR.J is a FloatingReset, Bills+141, that arose from a 50% conversion from the FixedReset SLF.PR.G. It commenced trading 2015-6-30.