DBRS Downgrades Six Ratings of Preferred Shares Issued by Split Share Companies
DBRS has today downgraded six ratings of structured Preferred Shares issued by various split share companies. Each of these split share companies has invested in a portfolio of securities (the Portfolio) funded by issuing two classes of shares – dividend-yielding preferred shares (the Preferred Shares) and capital shares (the Capital Shares). The Preferred Shares benefit from a stable dividend yield and downside protection on their principal via the net asset value (NAV) of the Capital Shares.
Each of the Preferred Shares has experienced considerable declines in downside protection during the past few months amidst tremendous volatility in global equity markets. Due to these declines in downside protection, the previous ratings assigned to these companies are no longer appropriate. DBRS has today taken rating action on these six Preferred Shares ratings based on lower levels of downside protection being established from lower NAVs of the affected split share companies. Some of the Preferred Shares have been assigned Pfd-5 (low) ratings with a Negative trend because the NAVs of their respective split share companies must now appreciate considerably in order for the Preferred Shares to receive full principal at maturity.
Notes:
The applicable methodology is Split Share Issuers: A Performance Overview, which can be found on our website under Methodologies.
This is a Structured Finance rating.
For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.
Ratings
| Issuer | Debt Rated | Rating Action | Rating | Trend | Notes | Published |
|---|---|---|---|---|---|---|
| AIC Global Financial Split Corp. | Preferred Shares | Downgraded | Pfd-5 (low) | Neg | Mar 5, 2009 | |
| Canadian Life Companies Split Corp. | Preferred Shares | Downgraded | Pfd-4 | Neg | Mar 5, 2009 | |
| Dividend 15 Split Corp. | Preferred Shares | Downgraded | Pfd-3 | Stb | Mar 5, 2009 | |
| S Split Corp. | Preferred Shares | Downgraded | Pfd-3 | Stb | Mar 5, 2009 | |
| SL Split Corp. | Preferred Shares | Downgraded | Pfd-5 (low) | Neg | Mar 5, 2009 | |
| Split Yield Corporation | Class I Cumulative Preferred Shares | Downgraded | Pfd-5 (low) | Neg | Mar 5, 2009 |