DBRS Confirms Ratings on IGM Financial Inc.

DBRS has today confirmed the ratings of IGM Financial Inc.’s (IGM, or the Company) Unsecured Debentures at A (high) and the First Preferred Shares at Pfd-2 (high). Trends for both are Stable.

IGM is one of the most consistently profitable financial services companies in Canada, reflecting a leading market position in the mutual funds manufacturing and distribution market through the operations of both Investors Group Inc. (IG) and Mackenzie Financial Corporation (Mackenzie). The rating is primarily based on the profitability, operating cash flow and business strengths of the Company’s IG subsidiary, while recognizing the complementary positive contribution of diverse products, brands and distribution channels offered through Mackenzie and Investment Planning Counsel Inc.

In addition to strong profitability, the Company has a conservative financial profile. Debt plus preferred shares-to-EBITDA was less than 1x in 2011, which is conservative, and the Company’s ratio of debt plus preferred shares-to-total capitalization remains appropriate for the rating, at just over 25%. While IG’s redemption rates are better than the industry average, the continuing net mutual fund redemptions at Mackenzie are not yet a major concern in determining IGM’s rating.

As a member of the Power Financial Corporation (Power) group of companies, IGM benefits from the additional financial flexibility of having a strategic shareholder and the associated strong governance and risk avoidance management model typical of Power subsidiaries.

Notes:
The applicable methodology is Rating Asset Management Companies (July 2012), which can be found on DBRS’s website at www.dbrs.com, under Methodologies.

The sources of information used for this rating include company documents. DBRS considers the quality of information available to it for the purposes of providing this rating of satisfactory quality.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

Lead Analyst: John van Boxmeer
Rating Committee Chair: Brenda Lum
Initial Rating Date: Jan. 29, 1987 (Unsecured Debentures); May 1, 2001 (First Preferred Shares)
Most Recent Rating Update: September 22, 2011