Press Release
DBRS Takes Rating Action on 18 Preferred Shares/Securities Issued by Split Share Companies or Trusts
Split Shares & FundsDBRS has today taken rating action on structured preferred shares issued by 18 split share companies and trusts (the Issuers).
Each of the Issuers has invested in a portfolio of securities (the Portfolio) funded by issuing two classes of shares – dividend-yielding preferred shares or securities (the Preferred Shares) and capital shares or units (the Capital Shares). The main form of credit enhancement available to these Preferred Shares is a buffer of downside protection. Downside protection corresponds to the percentage decline in market value of the Portfolio that must be experienced before the Preferred Shares would be in a loss position. The amount of downside protection available to Preferred Shares will fluctuate over time based on changes in the market value of the Portfolio.
Of the 18 structured Preferred Share ratings updated today by DBRS, 16 have been upgraded and two have been downgraded. The upgraded ratings reflect an increase in net asset value (NAV) of the respective portfolios over the past four months and a greater stability in equity prices over this period. Two Preferred Share ratings were downgraded mainly because their Issuers have 100% exposure to Canadian life insurance companies, whose equity prices declined in value over the past four months.
DBRS will continue to closely monitor changes in the credit quality of these Preferred Shares. The timing of rating actions will generally follow the surveillance guidelines listed in DBRS’s revised split share methodology, “Rating Canadian Split Share Companies and Trusts.”
Notes:
The applicable methodology is Rating Canadian Split Share Companies and Trusts, which can be found on our website under Methodologies.
This is a Structured Finance rating.
Ratings
AllBanc Split Corp.
Allbanc Split Corp. II
BNS Split Corp. II
Brompton Lifeco Split Corp.
Energy Split Corp. II
Energy Split Corporation
Faircourt Income & Growth Split Trust
Faircourt Split Trust
Financial 15 Split Corp.
Mulvihill Premium Canadian Bank
North American Financial 15 Split Corp.
SL Split Corp.
SNP Split Corp.
Sixty Split Corp.
Soundvest Split Trust
Split REIT Opportunity Trust
TD Split Inc.
World Financial Split Corp.
ALL MORNINGSTAR DBRS RATINGS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS AND ADDITIONAL INFORMATION REGARDING MORNINGSTAR DBRS RATINGS, INCLUDING DEFINITIONS, POLICIES, RATING SCALES AND METHODOLOGIES.
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Methodology Used:
Contacts
- Jamie Feehely
Managing Director, CDN Structured Finance - Global Structured Finance
+1 416 597 7312
jfeehely@dbrs.com