New Issue: SLF FixedReset 4.25%+273

Sun Life Financial has announced:

a Canadian public offering of $250 million of Class A Non-Cumulative Rate Reset Preferred Shares Series 12R (the “Series 12R Shares”). The Series 12R Shares will be issued to the public at a price of $25.00 per share and holders will be entitled to receive non-cumulative preferential fixed quarterly dividends for the initial period ending December 31, 2016, as and when declared by the Company’s board of directors, payable in the amount of $0.26563 per Preferred Share, to yield 4.25 per cent annually.

On December 31, 2016, and every five years thereafter, the dividend rate will reset at a rate equal to the 5-Year Government of Canada bond yield plus 2.73 per cent. Subject to certain conditions, holders may elect to convert any or all of their Series 12R Shares into an equal number of Class A Non-Cumulative Floating Rate Preferred Shares Series 13QR (the “Series 13QR Shares”) on December 31, 2016 and on the 31st of December every fifth year thereafter. Holders of the Series 13QR Shares will be entitled to receive non-cumulative preferential floating rate quarterly dividends, as and when declared by the Company’s board of directors, equal to the then 3-month Government of Canada Treasury Bill yield plus 2.73 per cent.

The net proceeds of the offering will be used for general corporate purposes. The offering will be underwritten by a syndicate led by Scotia Capital Inc., CIBC and TD Securities Inc. on a bought deal basis, and is expected to close on November 10, 2011. The proceeds from this domestic public offering are expected to qualify as Tier 1 capital of Sun Life Financial Inc. under current capital adequacy guidelines established by the Office of the Superintendent of Financial Institutions (OSFI).

The underwriters have been granted an option to purchase up to an additional $50 million of the Series 12R Shares exercisable at any time up to two business days before closing. The maximum gross proceeds raised under the offering will be $300 million if this option is exercised in full.

Subject to regulatory approval, Sun Life Financial Inc. may redeem the Series 12R Shares in whole or in part on December 31, 2016 and on the 31st of December every five years thereafter.

An application is being made to list the Series 12R Shares as of the closing date on the Toronto Stock Exchange.

Sun Life also announced the redemption of some SLEECS:

Sun Life Capital Trust, a subsidiary of Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF), today announced its intention to redeem at par on December 31, 2011, all of its outstanding $950 million principal amount of Sun Life ExchangEable Capital Securities-Series A (the “SLEECS-Series A”). The SLEECS-Series A are redeemable at the Trust’s option on December 31, 2011, at a redemption price per SLEECS-Series A equal to $1,000 plus unpaid “indicated yield” to that date. Notice will be delivered to holders of SLEECS-Series A in accordance with the terms outlined in the prospectus for the SLEECS-Series A.

After the SLEECS-Series A are redeemed, holders of SLEECS-Series A will cease to be entitled to distributions of “indicated yield” and will not be entitled to exercise any rights as holders other than to receive the redemption price.

One Response to “New Issue: SLF FixedReset 4.25%+273”

  1. […] SLF.PR.I is a FixedReset, 4.25%+273, announced November 3. […]

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