DBRS Assigns Provisional Rating of A (low), Stable, to CI Financial Corp’s New Senior Unsecured Debt

DBRS Limited (DBRS) has today assigned a provisional rating of A (low) with a Stable trend to CI Financial Corp’s (CIF) proposed Senior Unsecured Debentures expected to mature in December 2020. The rating on the new CIF debentures reflects the rating of CIF as the parent of CI Investments Inc. (CII), which is rated A (low) and the equalization of their ratings in the absence of structural subordination.

Unlike prior debt issued by CIF, the new debentures do not benefit from a guarantee from the operating subsidiary, CI Investments Inc. (CII). There is currently no CIF issued public debt remaining and the remaining debt of CII has been called for redemption in a couple of weeks (December 14, 2015). After the redemption of the CII debt, the cross-guarantees between CIF and CII will be eliminated and management has announced that it will renegotiate the terms of its bank debt to rank it pari passu with the new CIF debt and will limit CIF’s issuance of future debt from its subsidiaries, thereby minimizing the degree of structural subordination.

Notes:
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.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The applicable methodologies are Rating Companies in the Asset Management Industry (January 2015) and Rating Holding Companies and Their Subsidiaries (January 2015) which can be found on our website under Methodologies.