Ontario Commission des P.O. Box 55, 19th Floor CP 55, 19e étage
Securities valeurs mobilières 20 Queen Street West 20, rue queen ouest
Commission de l’Ontario Toronto ON M5H 3S8 Toronto ON M5H 3S8
IN THE MATTER OF ONTARIO SECURITIES COMMISSION RULE 13-502 FEES
AND
IN THE MATTER OF SUN LIFE CAPITAL TRUST II (the “Trust”), SUN LIFE ASSURANCE COMPANY OF CANADA (“SLA”) AND SUN LIFE FINANCIAL INC. (“SLF” and, together with the Trust and SLA, the “Filers”)
ORDER
WHEREAS the Director under the Ontario Securities Act has received an application on behalf of the Filers for an order, pursuant to section 6.1 of Ontario Securities Commission (the “Commission”) Rule 13-502 Fees (the “Fees Rule”), that the requirements to pay a participation fee under section 2.2 of the Fees Rule shall not apply to the Trust, subject to certain terms and conditions.
AND WHEREAS the Filers have represented to the Commission that:
The Trust is a trust established under the laws of Ontario by Computershare Trust Company of Canada, as trustee (the “Trustee”) pursuant to a declaration of trust dated as of November 6, 2009, as amended and restated on November 20, 2009, and as it may be further amended, restated and supplemented from time to time (the “Declaration of Trust”).
The Trust’s head office is located at 150 King Street West, Toronto, Ontario, M5H 1J9. The Trust has a financial year end of December 31.
The Trust completed an initial public offering (the “Offering”) of 5.863% Sun Life ExchangEable Capital Securities - Series 2009-1 due December 31, 2108 (the “SLEECS”) in each province and territory of Canada (the “Reporting Jurisdictions”) on November 20, 2009 and may, from time to time, issue further series of notes substantially similar to the SLEECS (collectively with the SLEECS, the “Notes”). As a result of the Offering, the capital of the Trust consists of: (i) the SLEECS; and (ii) voting trust units (“Voting Trust Units”). All of the outstanding Voting Trust Units are held by SLA.
As a result of having obtained a receipt for the prospectus for the Offering dated November 17, 2009 (the “Prospectus”), the Trust is a reporting issuer in the Reporting Jurisdictions. The Trust is not, to its knowledge, in default of its reporting issuer obligations under the securities legislation of any of the Reporting Jurisdictions.
The Trust is a single purpose vehicle established for the purpose of effecting offerings of securities, including the SLEECS and Voting Trust Units (collectively, the “Trust Securities”) in order to provide SLA with a cost effective means of raising capital for Canadian insurance regulatory purposes by means of: (i) creating and selling the Trust Securities; and (ii) acquiring and holding assets, which will consist primarily of a senior unsecured debenture of SLA (the “SLA Debenture”) and other eligible assets specified in the Prospectus (collectively, the “Trust Assets”). The Trust Assets will generate income for the payment of principal, interest, the redemption price, if any, and any other amounts, in respect of the Trust’s debt securities, including the SLEECS. The Trust will not carry on any operating activity other than in connection with offerings of Trust Securities and in connection with the Trust Assets.
No Trust Securities are currently listed on a marketplace as defined in National Instrument 21-101 Marketplace Operation.
Pursuant to an administration agreement dated November 6, 2009, as amended and restated on November 20, 2009 and as it may be further amended and restated from time to time, entered into between the Trustee and SLA, the Trustee has delegated to SLA certain of its obligations in relation to the administration of the Trust. SLA, as administrative agent, will, at the request of the Trustee, administer the day-to-day operations of the Trust and perform such other matters as may be requested by the Trustee from time to time.
SLA is an insurance company under the Insurance Companies Act (Canada) (the “ICA”) and is regulated by the Superintendent of Financial Institutions (Canada) (the “Superintendent”). The head office of SLA is located at 150 King Street West, Toronto, Ontario, M5H 1J9.
SLF holds all of the issued and outstanding shares of SLA.
The SLEECS, including accrued and unpaid interest thereon, will be exchanged automatically, without the consent of the holders thereof, for newly issued Class A shares Series V of SLA (“SLA Exchange Preferred Shares”) if: (i) an application for a winding-up order in respect of SLA pursuant to the Winding-Up and Restructuring Act (Canada) is filed by the Attorney General of Canada or a winding-up order in respect of SLA pursuant to that Act is granted by a court; (ii) the Superintendent advises SLA in writing that the Superintendent has taken control of SLA or its assets pursuant to the ICA; (iii) the Superintendent advises SLA in writing that the Superintendent is of the opinion that SLA has a net Tier 1 capital ratio of less than 75% or an MCCSR ratio (as that term is defined in the Prospectus) of less than 120%; (iv) the board of directors of SLA advises the Superintendent in writing that SLA has a net Tier 1 capital ratio of less than 75% or an MCCSR ratio of less than 120%; or (v) the Superintendent directs SLA pursuant to the ICA to increase its capital or provide additional liquidity and SLA elects to cause the Automatic Exchange (as that term is defined in the Prospectus) as a consequence of the issuance of such direction or SLA does not comply with such direction to the satisfaction of the Superintendent within the time specified therein.
The SLA Exchange Preferred Shares will pay quarterly non-cumulative preferential cash dividends, as and when declared by the board