Sun Life announces interest rate reset on Limited Recourse Capital Notes Series

Sun Life (TSX: SLF, NYSE: SLF) set a new interest rate on its $1 billion principal amount of Limited Recourse Capital Notes Series 2021-1.

Rhea-AI Summary

Sun Life (TSX: SLF, NYSE: SLF) set a new interest rate on its $1 billion principal amount of Limited Recourse Capital Notes Series 2021-1. From June 30, 2026 to June 30, 2031, the Notes will bear interest at 5.614% per annum, payable semi-annually, maturing June 30, 2081.

The Notes are backed by Class A Non-Cumulative Rate Reset Preferred Shares Series 14 held in a Limited Recourse Trust. Sun Life may redeem the Notes, subject to regulatory approval, during a window in 2031 and every five years thereafter.

Argus Jun 30 session

+0.42% close to close Open Argus

Details

News Market Reaction – SLF

In the Jun 30 session, SLF gained 0.42%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Market Context

This announcement clarifies SLF’s funding cost on $1 billion of Limited Recourse Capital Notes, rese...

Analysis

This announcement clarifies SLF’s funding cost on $1 billion of Limited Recourse Capital Notes, resetting the coupon to 5.614%. Investors may watch future redemption choices and how the long-dated 2081 maturity fits capital structure priorities.

Key Figures

Principal amount of Notes: $1 billion Original coupon rate: 3.60% Reset interest rate: 5.614% per annum +5 more

Principal amount of Notes

$1 billion

Limited Recourse Capital Notes Series 2021-1

Original coupon rate

3.60%

Limited Recourse Capital Notes Series 2021-1

Reset interest rate

5.614% per annum

From Jun 30, 2026 to Jun 30, 2031

Spread over Government of Canada Yield

2.604%

Reset formula under Indenture

Series 14 preferred shares issued

1,000,000 shares

Class A Non-Cumulative Rate Reset Preferred Shares Series 14

Notes maturity date

June 30, 2081

Scheduled maturity of Limited Recourse Capital Notes

Redemption window

May 31, 2031 to June 30, 2031

First optional redemption period, with approvals

Redemption notice period

15 to 60 days

Required prior notice for redeeming Notes

Historical Context

5 past events · Latest: Jun 16

5 events

1. Jun 16

   Clinical access partnership

   24h Move

   +0.4%

   Partnership with Medzown to expand access to clinical trials for complex diseases.

2. Jun 10

   Platform integration

   24h Move

   +1.3%

   Addition of Sun Life to Centro’s API-powered RFP platform for benefits distribution.

3. Jun 04

   Community investment award

   24h Move

   +1.2%

   Recognition of Sun Life U.S. president linked to major housing and community support investments.

4. May 26

   Share repurchase renewal

   24h Move

   -0.6%

   Regulatory approval to renew normal course issuer bid for up to 10,000,000 shares.

5. May 21

   Claims trend report

   24h Move

   -0.2%

   High-cost claims report highlighting drivers of multimillion-dollar medical claims for employers.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

limited recourse capital notes, subordinated indebtedness, trust indenture, government of canada yield, +1 more

5 terms

limited recourse capital notes financial

"3.60% Limited Recourse Capital Notes Series 2021-1 (Subordinated Indebtedness)"

Limited recourse capital notes are debt-like securities where repayment and investor claims are restricted to the cash flows or assets tied to a specific pool, project, or collateral; holders cannot pursue the issuer’s other assets if those designated sources fail. For investors this usually means higher potential yield but greater risk—think of lending money secured only by a single rental property’s rent rather than the borrower’s entire balance sheet, so returns depend on that asset’s performance.

subordinated indebtedness financial

"3.60% Limited Recourse Capital Notes Series 2021-1 (Subordinated Indebtedness)"

Debt that carries lower priority for repayment than other borrowings, meaning holders are paid only after higher‑priority creditors are made whole if the borrower runs into financial trouble; think of it as standing at the back of a queue at a checkout. It matters to investors because it usually carries higher interest to compensate for greater risk, affects how much creditors recover in default, and influences a borrower’s overall credit profile and cost of borrowing.

trust indenture regulatory

"In accordance with the terms of the trust indenture dated June 30, 2021"

A trust indenture is a legal agreement between a company that borrows money and a special bank or trust company that makes sure the company follows its promises. It acts like a rulebook to protect lenders, ensuring the company pays back loans and follows safety rules. This helps investors feel more confident that their money is safe.

government of canada yield financial

"sum of the Government of Canada Yield (as defined in the Indenture)"

The Government of Canada yield is the annual return investors receive from lending money to the Canadian federal government through its bonds and treasury notes; it’s shown as a percentage and moves as buyers and sellers trade those securities. Investors use it like a baseline interest rate—similar to a bank’s advertised savings rate—for valuing other investments, setting borrowing costs and gauging overall economic confidence, because government bonds are seen as very low-risk.

prospectus supplement regulatory

"The Notes and the Series 14 Shares were issued under a prospectus supplement dated June 24, 2021."

A prospectus supplement is an additional document provided alongside a company's main offering details, offering updated or extra information about a specific financial product being sold. It helps investors understand the latest terms, risks, and details of the investment, similar to how an update or revision clarifies or expands on original instructions, ensuring they have current and complete information before making a decision.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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TORONTO, June 29, 2026 /PRNewswire/ - Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) (the "Company") announced today the interest rate for its $1 billion principal amount of 3.60% Limited Recourse Capital Notes Series 2021-1 (Subordinated Indebtedness) (the "Notes") for the five-year period commencing June 30, 2026.

In accordance with the terms of the trust indenture dated June 30, 2021 (the "Indenture"), the interest rate on the Notes for the period from and including June 30, 2026, to but excluding June 30, 2031, will be 5.614% per annum.

The interest rate was calculated as the sum of the Government of Canada Yield (as defined in the Indenture) determined as at June 29, 2026, plus 2.604%. Interest on the Notes will continue to be payable semi-annually in arrears on June 30 and December 31 of each year, with the first such payment occurring on December 31, 2026.

The Notes are scheduled to mature on June 30, 2081. In connection with the issuance of the Notes, the Company issued 1,000,000 Class A Non-Cumulative Rate Reset Preferred Shares Series 14 (the "Series 14 Shares") held by Computershare Trust Company of Canada, as trustee of Sun Life LRCN Trust (the "Limited Recourse Trust"). In case of non-payment of interest on or principal of the Notes when due, the recourse of each noteholder will be limited to that holder's proportionate share of the Limited Recourse Trust's assets, which will consist of Series 14 Shares except in limited circumstances. The Notes and the Series 14 Shares were issued under a prospectus supplement dated June 24, 2021.

The Company may redeem the Notes, with the prior written approval of the Superintendent of Financial Institutions (Canada), in whole or in part, during the period from May 31, 2031 to and including June 30, 2031 and every five years thereafter, on not less than 15 nor more than 60 days' prior notice, and only upon the redemption by the Company of such number of Class A Shares Series 14 with an aggregate face amount equal to the aggregate principal amount of Notes redeemed, in accordance with the terms of such shares.

For more information, the prospectus supplement dated June 24, 2021 is available on the Company's SEDAR+ profile.

About Sun Life
Sun Life is a leading international financial services organization providing asset management, wealth, insurance and health solutions to individual and institutional Clients. Sun Life has operations in a number of markets worldwide, including Canada, the U.S., the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of March 31, 2026, Sun Life had total assets under management of $1.58 trillion. For more information, please visit www.sunlife.com.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.

Note to editors: All figures in Canadian dollars.

To contact Sun Life media relations, please email Media.Relations@sunlife.com.

To contact Sun Life investor relations, please email Investor_Relations@sunlife.com.

View original content to download multimedia:https://www.prnewswire.com/news-releases/sun-life-announces-interest-rate-reset-on-limited-recourse-capital-notes-series-302813707.html

SOURCE Sun Life Financial Inc. - Financial News

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What new interest rate did Sun Life (SLF) set on its Limited Recourse Capital Notes Series 2021-1 starting June 30, 2026?

Sun Life set a 5.614% annual interest rate on its $1 billion Limited Recourse Capital Notes Series 2021-1 from June 30, 2026 to June 30, 2031. According to Sun Life, the rate equals the Government of Canada Yield on June 29, 2026 plus 2.604%.

How often will Sun Life (SLF) pay interest on its Limited Recourse Capital Notes Series 2021-1 after the 2026 rate reset?

Interest on the Sun Life Limited Recourse Capital Notes Series 2021-1 will continue to be paid semi-annually in arrears. According to Sun Life, payments fall on June 30 and December 31 each year, with the first payment at the new rate due December 31, 2026.

When do Sun Life (SLF) Limited Recourse Capital Notes Series 2021-1 mature, and what is their principal amount?

The Sun Life Limited Recourse Capital Notes Series 2021-1 have a scheduled maturity date of June 30, 2081, with a principal amount of $1 billion. According to Sun Life, these Notes are subordinated indebtedness forming part of its long-term capital structure.

What provides security for holders of Sun Life (SLF) Limited Recourse Capital Notes Series 2021-1 in case of non-payment?

In a non-payment event, noteholders’ recourse is limited to assets of Sun Life LRCN Trust, mainly Series 14 preferred shares. According to Sun Life, each holder has a proportionate interest in the trust’s Class A Non-Cumulative Rate Reset Preferred Shares Series 14.

When can Sun Life (SLF) redeem its Limited Recourse Capital Notes Series 2021-1, and under what conditions?

Sun Life may redeem the Notes, with prior approval from the Superintendent of Financial Institutions (Canada), between May 31, 2031 and June 30, 2031 and every five years afterward. According to Sun Life, redemption requires concurrently redeeming matching face amount of Class A Shares Series 14.