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Sun Life Financial announces preferred share issue

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Sun Life Financial has announced a Canadian public offering of CAD200m of class A non-cumulative five-year rate reset preferred shares series 6R.

Sun Life Financial has announced a Canadian public offering of CAD200m of class A non-cumulative five-year rate reset preferred shares series 6R.

The shares will be issued to the public at a price of CAD25.00 per share and holders will be entitled to receive non-cumulative preferential fixed quarterly dividends for the initial period ending 30 June 2014, as and when declared by the company’s board of directors, payable in the amount of CAD0.375 per preferred share, to yield 6.0 per cent annually.

On 30 June 2014, and every five years thereafter, the dividend rate will reset at a rate equal to the five-year government of Canada bond yield plus 3.79 per cent.

Subject to certain conditions, holders may elect to convert any or all of their shares into an equal number of class A non-cumulative floating rate preferred shares series 7QR on 30 June 2014 and on the 30 of June every fifth year thereafter.

Holders of the series 7QR 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 three-month government of Canada treasury bill yield plus 3.79 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 TD Securities and BMO Capital Markets on a bought deal basis, and is expected to close on 20 May 2009. The proceeds from this domestic public offering are expected to qualify for tier 1 capital.

The underwriters have been granted an option to purchase up to an additional CAD50m of the series 6R shares exercisable at any time up to two business days before closing. The maximum gross proceeds raised under the offering will be CAD250m if this option is exercised in full.

Subject to regulatory approval, Sun Life Financial may redeem the series 6R shares in whole or in part on 30 June 2014 and on the 30 of June every five years thereafter.

An application is being made to list the series 6R shares as of the closing date on the Toronto Stock Exchange.

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