Unlock Superior Returns: Capitalizing on Sun Life's Preferred Share Conversion Deadline

Investors holding Sun Life Financial's Series 8R and 9QR preferred shares face a pivotal decision by June 16, 2025: convert their holdings to optimize income streams or risk missing out on superior yields. With a strategic conversion window closing soon and rate reset dynamics favoring aggressive action, this is a rare opportunity to align portfolios with shifting market conditions.

The Conversion Mechanics: A Race Against Time

Sun Life's Series 8R (fixed-rate) and Series 9QR (floating-rate) preferred shares are set to reset their dividend rates on June 30, 2025, following a critical announcement on May 30, 2025. Shareholders have until 5:00 p.m. ET on June 16 to convert their holdings on a one-for-one basis. The stakes are clear:
- Series 8R currently offers a 4.23% fixed yield, but its reset rate will lock in for five years, exposing investors to prolonged exposure if rates decline.
- Series 9QR, with its 4.05% floating rate, adjusts every three months, allowing holders to capitalize on short-term rate fluctuations.

The floating rate's agility is the key to outperforming in an environment where central banks may cut rates to combat economic slowdowns. By converting to Series 9QR now, investors can lock in the May 30 reset rate—likely to reflect current market optimism—before potential downward adjustments.

Why Convert to Series 9QR?

1. Seize the Short-Term Yield Advantage

While Series 8R's fixed yield currently edges out the floating rate, this narrow margin is a mirage. The five-year fixed rate carries significant rate-cut risk: if the Bank of Canada or the Federal Reserve reduces rates, Series 8R holders will be stuck with a declining real return for half a decade. In contrast, Series 9QR's quarterly reset ensures investors capture the highest possible yields during periods of rate stability or minor hikes—and avoid the full brunt of cuts.

2. Leverage Liquidity and Flexibility

Series 9QR's floating-rate structure mirrors the three-month SOFR or LIBOR benchmarks, which are currently elevated due to lingering inflation pressures. Converting now positions investors to benefit from the initial reset period (ending September 2025), which is likely to reflect today's robust yield environment.

3. Mitigate Automatic Conversion Risks

If either series falls below one million shares outstanding after June 30, the remaining shares will automatically convert to the other series. This creates a “herd mentality” risk: if many investors cling to Series 8R's fixed yield, its liquidity could evaporate, forcing unwanted exposure to Series 9QR's volatility. Proactive conversion ensures control over portfolio composition.

Addressing the Risks

• Liquidity Concerns: Both series trade on major exchanges, but thinly traded positions post-June 30 could widen bid-ask spreads. Act before June 16 to avoid forced conversions.
• Redemption Clauses: While neither series is being redeemed in 2025, Series 8R holders face a $25.00 redemption price starting 2030, versus Series 9QR's $25.50. The premium for 9QR underscores its long-term value.
• U.S. Regulatory Limits: Non-U.S. investors must confirm holding eligibility under SEC exemptions. Contact brokers immediately to ensure compliance.

The Bottom Line: Act Before the Clock Runs Out

The June 16 deadline is non-negotiable. Investors who delay risk losing the ability to:
- Secure the May 30 reset rate on Series 9QR.
- Avoid automatic conversions driven by low liquidity.
- Position themselves for quarterly yield resets that outpace inflation and outlast fixed-rate stagnation.

Final Call to Action

1. Contact your broker today to initiate the conversion process.
2. Review Sun Life's May 30 announcement to gauge the new rate dynamics.
3. Act decisively: The difference between 4.23% and a dynamically adjusted 4.05% (or higher) could define your income portfolio's resilience in 2025 and beyond.

In an era of uncertain rates, agility is everything. Convert to Series 9QR—and let flexibility work for you.

For further details, contact Sun Life Investor Relations at Investor_Relations@sunlife.com.