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

DBRS has today assigned a final 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) and discontinued the rating on the Company’s Class B Preferred Shares, which have been redeemed by the Company on March 8, 2013. 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 allowed holders of the Capital Shares to extend the term of their investments for an additional five years beyond their original redemption date of March 8, 2013. The Class C Preferred Shares have been issued in order to maintain the Company’s desired leveraged split share structure.

Net proceeds of the offering will be used to purchase additional common shares of the five issuers currently held in the portfolio: Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada and The Toronto-Dominion Bank.

The Pfd-2 (low) rating of the Class C Preferred Shares is primarily based on the downside protection available to holders of the Class C Preferred Shares (55.0%), the Class C Preferred Share distribution coverage ratio (2.0 times) and the credit quality of the underlying companies in the Company’s portfolio.

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.