DBRS Finalizes Provisional Rating on Canadian General Investments, Limited 3.75% Cumulative Redeemable Class A Preference Shares, Series 4

DBRS has today finalized its provisional rating of Pfd-1 (low) on the 3.75% Cumulative Redeemable Class A Preference Shares, Series 4 (the Series 4 Preference Shares) issued by Canadian General Investments, Limited (the Company). DBRS has also confirmed the rating of the 3.90% Cumulative Redeemable Class A Preference Shares, Series 3 (the Series 3 Preference Shares) at Pfd-1 (low) and discontinued the rating of the 4.65% Cumulative Redeemable Class A Preference Shares, Series 2 (the Series 2 Preference Shares), which have been fully redeemed. The Company issued 3,000,000 Series 4 Preference Shares at an issue price of $25.00 per Series 4 Preference Share, which rank pari passu with all other series of Class A Preference Shares (including the Series 3 Preference Shares). The Series 4 Preference Shares will be retractable at the option of the holder on or after June 15, 2023.

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) will not change significantly. Net proceeds of the Series 4 Preference Share offering were used along with available cash from the Portfolio to repay the funds borrowed for the redemption of the Series 2 Preference Shares. After repayment of the short-term loan and other offering expenses, initial downside protection available to holders of the Preference Shares is approximately 75.8%, based on the net asset value of the Company’s common shares as of May 24, 2013. Holders of the Series 4 Preference Shares are entitled to receive fixed cumulative preferential cash dividends of $0.9375 per annum yielding 3.75% on the initial issue price. Income received on the Portfolio will be able to cover approximately 139% of distributions to all series of Class A Preference Shares based on the Portfolio holdings as of May 24, 2013.

The Pfd-1 (low) rating is based on the initial level of downside protection available to holders of the Series 4 Preference Shares, the distribution coverage ratio, the diversification and past performance of the Portfolio and disclosure included in the final prospectus.

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.