DBRS Publishes Methodology for Rating Canadian Split Share Companies and Trusts

DBRS has today published an updated methodology for rating Canadian split share companies and trusts. With today’s release, DRBS has strengthened its split share rating process by raising its initial downside protection requirements for split share issuers whose portfolios are concentrated in the securities of a single issuer or a single industry. DBRS has also lowered its initial ratings for certain issuers based on the size of distributions to capital shares and the triggers for suspending such distributions. In addition, the updated methodology describes how DBRS incorporates an analysis of the historical volatility and correlation of an issuer’s portfolio in its rating process.

The methodology contains a surveillance section that addresses the time period required before DBRS will place ratings Under Review or upgrade or downgrade ratings as a result of changes in the net asset value (NAV) of a split share company or trust.

The methodology providing DBRS's processes and criteria is available by contacting us at info@dbrs.com.