PrefBlog

DBRS has announced that it:

has today downgraded the rating of the Class B Preferred Shares, Series 1 (the Class B Preferred Shares) issued by Big 8 Split Inc. (the Company) to Pfd-2 from Pfd-2 (high). This action removes the rating from Under Review with Negative Implications, where it was placed on October 29, 2009. The Class B Preferred Shares have been downgraded as a result of a re-leveraging of the Company. Prior to the re-leveraging, there were 1,067,005 Class B Preferred Shares and an equal number of Class A Capital Shares (the Capital Shares) outstanding. The Company declared and paid a dividend in Capital Shares to the current holders of the Capital Shares (0.6 Capital Shares for each Capital Share outstanding). The Company subsequently issued 1,165,203 new Class C Preferred Shares at $12 each and 525,000 additional Capital Shares at $20 each through a public offering. A greater number of Class C Preferred Shares were issued so that an equal number of Capital Shares and Preferred Shares of the Company would remain outstanding following the Capital Share dividend payment. The Class C Preferred Shares rank pari passu with the Class B Preferred Shares with respect to return of principal and payment of dividends.
…
Since the Class B Preferred Shares rank equal with the newly issued Class C Preferred Shares, all Preferred Shares of the Company will benefit from the same amount of downside protection. Following the completion of the re-leveraging, the downside protection available to the Preferred Shares has decreased from 71% to approximately 60% (after offering expenses). The rating on the Class B Preferred Shares has been downgraded to Pfd-2 to reflect the lower amount of downside protection available.

The scheduled final maturity date of the Class B Preferred Shares is December 15, 2013.

The intent to downgrade BIG.PR.B was discussed on PrefBlog.

Neither BIG.PR.B nor BIG.PR.C are tracked by HIMIPref™.

This entry was posted on Wednesday, December 16th, 2009 at 7:06 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.