LCS.PR.A Downgraded to Pfd-5(high) by DBRS

DBRS has announced that it:

has today downgraded the rating of the Preferred Shares issued by Brompton Lifeco Split Corp. (the Company) to Pfd-5 (high) from Pfd-4 (low).

In April 2007, the Company issued 3.1 million Preferred Shares (at $10 each), along with an equal number of Class A Shares (at $15 each). The termination date for both classes of shares issued is April 30, 2014.

Not the best timing ever to start a lifeco SplitShare Corporation!

On March 20, 2012, DBRS downgraded the ratings of the Preferred Shares to Pfd-4 (low) from Pfd-4 (high), due to the considerable drop in downside protection available to holders of the Preferred Shares. Since the rating downgrade, the NAV of the Company has been volatile, causing downside protection to fluctuate widely between -4.9% and 18.3%. The downside protection available to the Preferred Shares was 8.2% as of October 11, 2012, and the current Preferred Shares distribution coverage ratio is approximately 0.7 times. As a result of the downside protection falling and remaining below acceptable levels for a prolonged period, along with the insufficient distribution coverage ratio on the Portfolio, the rating has been further downgraded to Pfd-5 (high).

LCS.PR.A was last mentioned on PrefBlog when it was downgraded to Pfd-4(low) by DBRS. LCS.PR.A is not tracked by HIMIPref™ – not only is the Asset Coverage very low, but there are less than 2-million units outstanding.

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