DBRS Provisionally Rates AllBanc Split Corp. Class C Preferred Shares, Series 1 Pfd-2 (low)

DBRS has today assigned a provisional rating of Pfd-2 (low) to the Class C Preferred Shares, Series 1 (the Class C Preferred Shares) issued by AllBanc Split Corp. (the Company). On December 13, 2012, the Company announced the approval of a proposed share capital reorganization (the Reorganization) by holders of its Class A Capital Shares (the Capital Shares), which allows holders of the Capital Shares to extend the term of their investments an additional five years beyond their original redemption date of March 8, 2013. The previously issued Class B Preferred Shares will be redeemed on March 8, 2013, as originally outlined in their prospectus, and the Class C Preferred Shares will be issued in order to maintain the Company’s desired leveraged split share structure.

To the extent the net proceeds of the offering exceed funding requirements associated with these redemptions, the Company may use such net proceeds to purchase additional common shares of the five biggest Canadian banks: Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada and The Toronto-Dominion Bank.

The provisional rating is primarily based on the expected level of downside protection available to holders of the Class C Preferred Shares (55.0%), a Class C Preferred Share distribution coverage ratio greater than 1.0 times, and the credit quality of the underlying companies in the Company’s portfolio.

The assignment of final rating is subject to receipt by DBRS of final portfolio-related information that is consistent with the information DBRS has already reviewed, as well as the settlement of material transaction documents in a manner that is acceptable to DBRS, commensurate with the relevant rating level, and is in accordance with the applicable DBRS methodologies.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Canadian Split Share Companies and Trusts (August 2012), which can be found on our website under Methodologies.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.