Sun Life Financial To Offer Debentures Worth C$1 Billion
Zacks Investment Research | Sep 13, 2016 10:22PM ET
Sun Life Financial Inc. (TO:SLF) recently announced that it plans to issue about C$1 billion or $0.765 million in Series 2016-2 Subordinated Unsecured 3.05% Fixed/Floating Debentures in Canada. The debentures are scheduled to mature in 2028.
The company intends to deploy the net proceeds for general corporate purposes. This includes investments in subsidiaries and debt repayments to lower the same.
Sun Life Financial displays its prudence by issuing debentures amid a low interest rate environment. Given the low interest rate environment, the company is consciously making efforts to reduce its interest burden on borrowings, which in turn, is facilitating margin expansion. Also, the current rates make it easier for companies to meet their debt obligations on time. Most companies have preferred to issue debt at the prevailing low rates over the past few years and are expected to continue doing so before the Fed hikes rates.
This February, the company issued $350 million or $255.7 million of 3.10% Fixed/Floating Debentures scheduled for maturity in 2026.
Sun Life Financial’s debt to equity ratio at the end of the second quarter was 16.4%, up 360 basis points year over year. With the new issuance, the ratio is expected to move up 320 basis points. Also, Sun Life Financial needs to dish out about additional interest annually. In the last reported quarter, the company’s interest expense declined by about 6%. Nonetheless, the life insurer’s solid operational performance and robust financial position continue to support its efforts to generate substantial funds to service debt uninterruptedly.
SUN LIFE FINL Price
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.