The new notes' ratings are equivalent to the ratings on SLF's existing subordinated unsecured debt. Fitch anticipates that the net proceeds will be used for general corporate purposes, which may include investment in subsidiaries and repayment of debt.
SLF's financial leverage was 12.7% at
Fitch views SLF's debt service coverage (on a Canadian IFRS earnings basis excluding the net impact of market factors) of 6.6x for 2013 and 7.6x during the first quarter of 2014 as low for the rating level. Fitch expects fixed-charge coverage to remain near this level over the intermediate term but to improve in late 2014 and 2015. However, Fitch believes that under Canadian regulations, SLF has greater flexibility to upstream dividends from operating subsidiaries without regulatory approval than most U.S. peers.
Rating sensitivities for
Fitch rates the following:
Additional information is available at 'www.fitchratings.com'.
--'Insurance Rating Methodology' (
Insurance Rating Methodology
Source: Fitch Ratings
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