PrefBlog

DBRS has announced that it:

maintains its Under Review with Developing Implications status on the Pfd-4 rating of GMP Capital Inc.’s (GMP or the Company) Cumulative Preferred Shares. The rating was initially put Under Review with Developing Implications on June 18, 2019, following the announcement that GMP had agreed to sell substantially all of its capital markets business to Stifel Financial Corp. (Stifel). The review was maintained on September 18, 2019, as the transaction had yet to close.
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KEY RATING CONSIDERATIONS
The continuation of the review period takes into consideration that the future ultimate ownership and structure of GMP’s business has still not been finalized. DBRS Morningstar will assess GMP’s pro forma structure once it is known whether or not GMP is able to consolidate full ownership of Richardson GMP. This assessment will review the assets and liabilities composition, the Company’s ownership, the Company’s future strategic direction, and management’s ability to execute on this plan.

RATING DRIVERS
DBRS Morningstar could upgrade the rating if GMP’s franchise prospects and its post-transaction pro forma financials are deemed to be stronger with the consolidation of Richardson GMP. Conversely, the rating could be downgraded if GMP’s credit fundamentals weaken.

GMP was downgraded to Pfd-4(high) by DBRS in 2016. It was put on Review-Developing in June, 2019 and the review was extended in September, 2019.

This entry was posted on Tuesday, December 17th, 2019 at 11:50 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.