PrefBlog

BNS Split Corp II has announced:

that it has completed its public offering of 1,238,954 Class B Preferred Shares, Series 1 (“Series 1 Preferred Shares”), raising approximately $23.4 million. The Series 1 Preferred Shares were offered to the public by a syndicate of agents led by Scotia Capital Inc. In addition, the Company has redeemed all of its outstanding Class A Preferred Shares and 1,105,950 of its Class A Capital Shares.

The Series 1 Preferred Shares were offered in order to maintain the leveraged “split share” structure of the Company following the successful reorganization of the Company approved at a special meeting of holders of Class A Capital Shares on July 5, 2010, which among other things, extended the redemption date of the Class A Capital Shares for an additional five year term. At the close of business on September 22, 2010 there will be 2,477,908 Class A Capital Shares and 1,238,954 Series 1 Preferred Shares issued and outstanding.

The refunding was reported on PrefBlog in the post BSC.PR.A Refunding Approved. BSC.PR.B will not be tracked by HIMIPref™ – too small! The company has published the prospectus for the issue.

Update, 2010-9-23: DBRS Rates BNS Split Corp. II Class B Preferred Shares, Series 1 Pfd-2 (low):

As of September 14, 2010, the downside protection available to the holders of the Class B Preferred Shares was 62%. Based on the current dividend yield on the Portfolio, the initial Class B Preferred Share dividend coverage ratio is approximately 1.9 times.

The Pfd-2 (low) rating of the Class B Preferred Shares is primarily based on the downside protection and dividend coverage available, as well as on the credit quality and consistency of dividend distributions of the Portfolio holdings.

The main constraints to the rating are the following:

1) The downside protection provided to holders of the Class B Preferred Shares is dependent on the value of the shares in the Portfolio.

2) Volatility of price and changes in the dividend policies of The Bank of Nova Scotia (BNS) may result in significant reductions in downside protection from time to time.

3) The concentration of the entire Portfolio in the common shares of BNS.

This entry was posted on Wednesday, September 22nd, 2010 at 10:00 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.