Sun Life 2015 Annual Report Download - page 146

13. Other Liabilities
13.A Composition of Other Liabilities
Other liabilities consist of the following:
As at December 31, 2015 2014
Accounts payable $ 2,470 $ 2,118
Bank overdrafts and cash pooling 166 4
Repurchase agreements (Note 5) 1,549 1,333
Accrued expenses and taxes 2,829 2,648
Borrowed funds 908 307
Senior financing 2,097 1,760
Accrued benefit liability (Note 26) 622 600
Secured borrowings from mortgage securitization (Note 5) 667 303
Other(1) 1,024 652
Total other liabilities $ 12,332 $ 9,725
(1) Includes third-party interest in consolidated investment funds managed by the Company of $271 for 2015 and $25 for 2014.
13.B Borrowed Funds
Borrowed funds include the following:
As at December 31,
Currency of
borrowing Maturity 2015 2014
Encumbrances on real estate Cdn. dollars Current – 2033 $ 294 $ 240
Encumbrances on real estate U.S. dollars Current – 2020 61 67
Other (1) U.S. dollars Current – 2017 553 —
Total borrowed funds $ 908 $ 307
(1) The loan bears interest at a spread over the one month London Inter Bank Offered Rate (“LIBOR”).
Interest expense for the borrowed funds was $18 and $17 for 2015 and 2014. The aggregate maturities of borrowed funds are included
in Note 6.
13.C Senior Financing
On November 8, 2007, a structured entity consolidated by us issued a US$1,000 variable principal floating rate certificate (the
“Certificate”) to a financial institution (the “Lender”). At the same time, Sun Life Assurance Company of Canada-U.S. Operations
Holdings, Inc. (“U.S. Holdings”), a subsidiary of SLF Inc., entered into an agreement with the Lender, pursuant to which U.S. Holdings
will bear the ultimate obligation to repay the outstanding principal amount of the Certificate and be obligated to make quarterly interest
payments at three-month LIBOR plus a fixed spread. SLF Inc. has fully guaranteed the obligation of U.S. Holdings. The structured
entity issued additional certificates after the initial issuance, totaling to US$515, none of which were issued during 2015. Total collateral
posted per the financing agreement was US$24 as at December 31, 2015 (US$24 as at December 31, 2014).
The maximum capacity of this agreement is US$2,500. The agreement expires on November 8, 2037 and the maturity date may be
extended annually for additional one-year periods upon the mutual agreement of the parties, provided such date is not beyond
November 8, 2067. The agreement can be cancelled or unwound at the option of U.S. Holdings in whole or in part from time to time, or
in whole under certain events.
For the year ended December 31, 2015, we recorded $19 of interest expense relating to this obligation ($16 in 2014). The fair value of
the obligation is $1,663 ($1,507 in 2014). The fair value is determined by discounting the expected future cash flows using a current
market interest rate adjusted by SLF Inc.‘s credit spread and is categorized in Level 3 of the fair value hierarchy.
144 Sun Life Financial Inc. Annual Report 2015 Notes to Consolidated Financial Statements