DBRS Provisionally Rates Canadian General Investments, Limited 3.75% Cumulative Redeemable Class A Preference Shares, Series 4

DBRS has today assigned a provisional rating of Pfd-1 (low) to the 3.75% Cumulative Redeemable Class A Preference Shares, Series 4 (the Series 4 Preference Shares) issued by Canadian General Investments, Limited (the Company). On April 29, 2013, the Company announced its intention to redeem all outstanding 4.65% Cumulative Redeemable Class A Preference Shares, Series 2 (the Series 2 Preference Shares) on May 29, 2013, and issue a new series of Series 4 Preference Shares on May 30, 2013. The Series 4 Preference Shares will be offered at an issue price of $25.00 and will rank pari passu with all other existing series of Class A Preference Shares.

Because the number of Series 4 Preference Shares issued will match the number of Series 2 Preference Shares being redeemed, the Company’s capital structure and current investment portfolio (the Portfolio, which focuses on medium- to long-term investments in Canadian corporations) are not expected to change significantly. Net proceeds from the offering will be used along with available cash from the Portfolio to repay the funds borrowed for the purpose of redeeming the Series 2 Preference Shares. After repayment of the short-term loan and other offering expenses, initial downside protection available to holders of the Series 4 Preference Shares will be approximately 75.0%, based on the net asset value of the Company’s common shares as of April 19, 2013. Holders of the Series 4 Preference Shares will be entitled to receive fixed cumulative preferential cash dividends of $0.9375 per annum yielding 3.75% on the initial issue price. Income to be received on the Portfolio will be able to cover approximately 124% of distributions to all series of Class A Preference Shares based on the Portfolio holdings as of April 19, 2013.

The provisional rating is based on the expected level of downside protection available to holders of the Series 4 Preference Shares, the expected distribution coverage ratio (1.2 times based on Portfolio holdings as of April 19, 2013), the diversification and past performance of the Portfolio and disclosure included in the preliminary prospectus.

The assignment of a 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.