DBRS Confirms CI Financial Corp. and CI Investments Inc. at A (low)

DBRS has today confirmed its rating on the Senior Unsecured Debentures of CI Financial Corp. (CI or the Company) and on both the Issuer Rating and the Senior Unsecured Debt rating of CI’s major operating subsidiary, CI Investments Inc. (CII), at A (low). The trends on all of the ratings remain Stable. The Issuer Rating of CII reflects CII’s contribution to CI as its major operating subsidiary, housing the mutual fund manufacturing operation and representing more than 95% of consolidated CI earnings. CI’s senior debt benefits from a CII guarantee that ranks pari passu with the senior obligations of CII. Conversely, CII’s outstanding debt is likewise supported by a guarantee from CI on the same senior basis.

The primary driver of the ratings is the Company’s business franchise and its relatively large size in the Canadian mutual fund industry. Tempering the Company’s strong franchise is the general uncertainty and volatility inherent in equity markets and increased competition from other wealth management service providers and products, which are pressuring the business model, market share and margins. Under DBRS’s methodology for rating asset managers, CI performs very well on both business strengths and financial metrics, resulting in its strong investment-grade rating.

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

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.

The applicable methodology is Rating Asset Management Companies (July 2012), which can be found on our website under Methodologies.

These ratings have been endorsed by DBRS Ratings Limited for use in the European Union.