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Senior Debentures and Innovative Capital Instruments (Tables) | 12 Months Ended
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Dec. 31, 2021
Financial Instruments [Abstract] |
Schedule of borrowings | Borrowed funds include the following:
As at December 31, | Currency of borrowing | Maturity | 2021 | 2020
Encumbrances on real estate | Cdn. dollars | Current - 2033 |  | $ | 323 |  |  | $ | 292 |
Encumbrances on real estate | U.S. dollars | Current - 2020 |  | 109 |  |  | 109 |
Total borrowed funds |  |  |  |  | $ | 432 |  |  | $ | 401 |
The following obligations are included in Senior debentures as at December 31:
| Interest rate | Earliest par call or redemption date | Maturity | 2021 | 2020
SLF Inc. senior debentures: |  |  |  |  |  |  |
Series E issued August 23, 2011(2) | 4.57 | % | n/a | 2021 |  | $ | — |  |  | $ | 300 |
Sun Life Assurance senior debentures:(3) |  |  |  |  |  |  |
Issued to Sun Life Capital Trust ("SLCT I") |  |  |  |  |  |  |
Series B issued June 25, 2002 | 7.09 | % | June 30, 2032(4) | 2052 |  | 200 |  |  | 200 |
Total senior debentures |  |  |  |  | $ | 200 |  |  | $ | 500 |
Fair value |  |  |  |  | $ | 271 |  |  | $ | 590 |
(1) All senior debentures are unsecured. (2) Redeemable in whole or in part at any time prior to maturity at a price equal to the greater of par and a price based on the yield of a corresponding Government of Canada bond plus 0.53% for the Series E debentures. On August 23, 2021, SLF Inc. redeemed all of its outstanding $300 principal amount, including all accrued and outstanding interest, of Series E Senior Unsecured 4.57% Debentures. (3) Redemption is subject to regulatory approval. (4) Redeemable in whole or in part on any interest payment date or in whole upon the occurrence of a Regulatory Event or Tax Event, as described in the debenture. Prior to June 30, 2032, the redemption price is the greater of par and a price based on the yield of a corresponding Government of Canada bond plus 0.32%; from June 30, 2032, the redemption price is par. The following obligations are included in Subordinated debt as at December 31, and qualify as capital for Canadian regulatory purposes:
| Interest rate | Earliest par call date(1) |  | Maturity | 2021 | 2020
Sun Life Assurance: |  |  |  |  |  |  |  |
Issued May 15, 1998(2) | 6.30 | % | n/a |  | 2028 |  | $ | 150 |  |  | 150 |
Sun Life Financial Inc.: |  |  |  |  |  |  |  |
Issued May 29, 2007(3) | 5.40 | % | May 29, 2037 | (4) | 2042 |  | 398 |  |  | 398 |
Issued February 19, 2016(5) | 3.10 | % | February 19, 2021 |  | 2026 |  | — |  |  | 350 |
Issued September 19, 2016(6) | 3.05 | % | September 19, 2023 |  | 2028 |  | 998 |  |  | 997 |
Issued November 23, 2017(7) | 2.75 | % | November 23, 2022 |  | 2027 |  | 400 |  |  | 399 |
Issued August 13, 2019(8) | 2.38 | % | August 13, 2024 |  | 2029 |  | 748 |  |  | 747 |
Issued May 8, 2020(9) | 2.58 | % | May 10, 2027 |  | 2032 |  | 995 |  |  | 995 |
Issued October 1, 2020(10) | 2.06 | % | October 1, 2030 |  | 2035 |  | 746 |  |  | 745 |
Issued November 18, 2021(11) | 2.46 | % | November 18, 2026 |  | 2031 |  | 497 |  |  | — |
Issued November 18, 2021(12),(14) | 2.80 | % | November 21, 2028 |  | 2033 |  | 995 |  |  | — |
Issued November 18, 2021(13),(14) | 3.15 | % | November 18, 2031 |  | 2036 |  | 498 |  |  | — |
Total subordinated debt |  |  |  |  |  | $ | 6,425 |  |  | $ | 4,781 |
Fair value |  |  |  |  |  | $ | 6,675 |  |  | $ | 5,190 |
(1) Subject to regulatory approval all obligations are redeemable 5-years after issuance date. From the date noted, the redemption price is par and redemption may only occur on a scheduled interest payment date. (2) 6.30% Debentures, Series 2, due 2028, issued by The Mutual Life Assurance Company of Canada, which subsequently changed its name to Clarica Life Insurance Company ("Clarica") and was amalgamated with Sun Life Assurance. These debentures are redeemable at any time. Prior to May 15, 2028, the redemption price is the greater of par and a price based on the yield of a corresponding Government of Canada bond plus 0.16%. (3) Series 2007-1 Subordinated Unsecured 5.40% Fixed/Floating Debentures due 2042. From May 29, 2037, interest is payable at 1.00% over CDOR. (4) For redemption of the 2007 debentures prior to the date noted, the redemption price is the greater of par and a price based on the yield of a corresponding Government of Canada bond plus 0.25%. (5) Series 2016-1 Subordinated Unsecured 3.10% Fixed/Floating Debentures due 2026. From February 19, 2021, interest is payable at 2.20% over CDOR. On February 19, 2021, SLF Inc. redeemed all of the outstanding $350 principal amount of these debentures in accordance with the redemption terms attached to such debentures. (6) Series 2016-2 Subordinated Unsecured 3.05% Fixed/Floating Debentures due 2028. From September 19, 2023, interest is payable at 1.85% over CDOR. Between September 19, 2021 and September 19, 2023, the redemption price is the greater of par and a price based on the yield of a corresponding Government of Canada bond plus 0.52%. (7) Series 2017-1 Subordinated Unsecured 2.75% Fixed/Floating Debentures due 2027. From November 23, 2022, interest is payable at 0.74% over CDOR. (8) Series 2019-1 Subordinated Unsecured 2.38% Fixed/Floating Debentures due 2029. From August 13, 2024, interest is payable at 0.85% over CDOR. (9) Series 2020-1 Subordinated Unsecured 2.58% Fixed/Floating Debentures due 2032. From May 10, 2027, interest is payable at 1.66% over CDOR. Between May 10, 2025 and May 10, 2027, the redemption price is the greater of par and a price based on the yield of a corresponding Government of Canada bond plus 0.52%. (10) Series 2020-2 Subordinated Unsecured 2.06% Fixed/Floating Debentures due 2035. From October 1, 2030, interest is payable at 1.03% over CDOR. Between October 1, 2025 and October 1, 2030, the redemption price is the greater of par and a price based on the yield of a corresponding Government of Canada bond plus 0.38%. (11) Series 2021-1 Subordinated Unsecured 2.46% Fixed/Floating Debentures due 2031. From November 18, 2026, interest is payable at 0.44% over CDOR. (12) Series 2021-2 Subordinated Unsecured 2.80% Fixed/Floating Debentures due 2033. From November 21, 2028, interest is payable at 0.69% over CDOR. Between November 21, 2026 and November 21, 2028, the redemption price is the greater of par and a price based on the yield of a corresponding Government of Canada bond plus 0.285%. (13) Series 2021-3 Subordinated Unsecured 3.15% Fixed/Floating Debentures due 2036. From November 18, 2031, interest is payable at 0.91% over CDOR. Between November 18, 2026 and November 18, 2031, the redemption price is the greater of par and a price based on the yield of a corresponding Government of Canada bond plus 0.335%. (14) Subject to contractual terms requiring us to redeem the underlying securities, in full, if the closing of the DentaQuest acquisition does not occur.
Schedule of significant terms and conditions | The table below presents additional significant terms and conditions of the SLEECS:
Issuer | Issuance date | Distribution or interest payment dates | Annual yield | Redemption date at the issuer’s option | Conversion date at the holder’s option | Principal amount
Sun Life Capital Trust ("SLCT I")(1)(2)(3)(4) |  |  |  |  |  |  |
SLEECS B | June 25, 2002 | June 30, December 31 | 7.093 | % |  | June 30, 2007 | Any time |  | $ | 200 |
(1) Subject to regulatory approval, SLCT I may (i) redeem any outstanding SLEECS, in whole or in part, on the redemption date specified above or on any distribution date thereafter and (ii) may redeem all, but not part of any class of SLEECS upon occurrence of a Regulatory Event or a Tax Event, prior to the redemption date specified above. (2) The SLEECS B may be redeemed for cash equivalent to (i) the greater of the Early Redemption Price or the Redemption Price if the redemption occurs prior to June 30, 2032 or (ii) the Redemption Price if the redemption occurs on or after June 30, 2032. Redemption Price is equal to one thousand dollars plus the unpaid distributions, other than unpaid distributions resulting from a Missed Dividend Event, to the redemption date. Early Redemption Price for the SLEECS B is the price calculated to provide an annual yield, equal to the yield of a Government of Canada bond issued on the redemption date that has a maturity date of June 30, 2032, plus 32 basis points, plus the unpaid distributions, other than unpaid distributions resulting from a Missed Dividend Event, to the redemption date. (3) The non-cumulative perpetual preferred shares of Sun Life Assurance issued upon an Automatic Exchange Event in respect of the SLEECS B will become convertible, at the option of the holder, into a variable number of common shares of SLF Inc. on distribution dates on or after December 31, 2032. (4) Holders of SLEECS B may exchange, at any time, all or part of their SLEECS B units for non-cumulative perpetual preferred shares of Sun Life Assurance at an exchange rate for each SLEECS of 40 non-cumulative perpetual preferred shares of Sun Life Assurance. SLCT I will have the right, at any time before the exchange is completed, to arrange for a substituted purchaser to purchase SLEECS tendered for surrender to SLCT I so long as the holder of the SLEECS so tendered has not withheld consent to the purchase of its SLEECS. Any non-cumulative perpetual preferred shares issued in respect of an exchange by the holders of SLEECS B will become convertible, at the option of the holder, into a variable number of common shares of SLF Inc. on distribution dates on or after December 31, 2032.

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