Credit ratings agency A.M. Best downgraded the issuer credit ratings of the various Sun Life Financial insurance subsidiaries this week. Additionally, Sun Life retains a somewhat elevated exposure to real estate-linked assets through its investments in commercial mortgages, direct real estate and residential and commercial mortgage-backed securities, A.M. Best concluded. In the decision, A.M. Best noted reduced earnings trends at the firms and significant risk from exposure to real-estate linked assets through investments in commercial loans and mortgage-backed securities. A.M. Best downgraded its issuer credit ratings to 'aa-' from 'aa', in move taht is reflective of Sun Life exposure to weakened equity investments and the sensitivity of its portfolio to continued, low interest rates in the United States. The credit ratings agency also affirmed the A-plus financial strength rating for Sun Life Assurance Co. of Canada, Sun Life Insurance and Annuity Co. of New York and Sun Life and Health Insurance Co. A.M. Best said a large portion of SLF’s real estate portfolio is underwritten in Canada, and expected to continue to perform better than similar investments in the United States, it said. Nonetheless, Sun Life still faces some ratings headwinds on mortgage investments. "Recently there has been some deterioration in quality in the U.S. mortgage portfolio with an increase in problem loan and foreclosure activity," A.M. Best said. "A.M Best will continue to closely monitor the performance of this portfolio." Write to Kerri Panchuk.