Moody’s Investors Service has affirmed the financial strength ratings of Sun Life Assurance Co. of Canada and the credit ratings of its various subsidiaries. The outlook for all ratings is stable.

The firm says that the rating affirmations follow the recent announcement by the group’s holding company, Sun Life Financial Inc., that its board of directors approved a corporate reorganization. In the reorganization, Sun Life Financial Inc. will create, and wholly own, a new asset management company. Sun Life Assurance will transfer its interests in Sun Life U.S., Massachusetts Financial Services Co., CI Fund Management, and Mclean Budden Ltd. to this new entity, AMC.

Moody’s said the affirmation of the current ratings and outlook of Sun Life and its subsidiaries is based on its expectation that the consolidated Sun Life group will continue to operate after the reorganization essentially as it had before, albeit legally side-by-side instead of stacking all operations under the Canadian operating company, Sun Life Assurance. The consolidated group will maintain the same revenues, earnings, and geographic strength and diversity as before the reorganization, Moody’s says.

The rating agency said that its key assumptions were full and continuing ownership of Sun Life US by Sun Life Financial Inc., no material acquisitions by Sun Life Financial Inc., no material changes to the company’s capital structure, and continuing reduction in the group’s consolidated financial leverage.

“Proceeding from the premise that no fundamental business change will result from the reorganization, the Sun Life companies should continue to benefit from their market presence in Canada, the strength and diversity of Canadian earnings, and the additional earnings diversity provided by Sun Life US and the mutual fund subsidiary, MFS. Good asset quality and adequate liquidity are additional rating strengths,” it says.

Moody’s said these strengths are tempered by a business mix that has a pronounced weighting in “wealth management” products. These products, which include variable and fixed annuities as well as mutual funds, expose Sun Life to equity market and interest rate risks and drive a higher degree of earnings volatility than protection products. In addition, the group’s acquisition activity has led to relatively high consolidated financial leverage and goodwill and a modest reduction in the quality of its regulatory capital.