Archive for the ‘New Issues’ Category

PRM.PR.A To Be Tracked By HIMIPref™

Monday, September 12th, 2022

Big Pharma Split Corp will soon be added to the HIMIPref™ database.

The preferred shares pay eligible dividends; the cash drag on the portfolio is massive.

DBRS rates the issue Pfd-3(high):

DBRS Limited (DBRS Morningstar) confirmed the rating of Pfd-3 (high) on the Preferred Shares issued by Big Pharma Split Corp. (the Company). The Company invests in a portfolio of approximately equally weighted common shares and securities (the Portfolio) convertible into or exchangeable for common shares (Equity Securities) of 10 issuers from the investable universe that must (1) be listed on a North American exchange, (2) pay a dividend, and (3) have sufficiently liquid options for their Equity Securities to permit the Portfolio Manager (i.e., Harvest Portfolio Group Inc.) to write options regarding such securities. The Portfolio Manager reconstitutes and rebalances the Portfolio at least semi-annually. No more than 20% of the net asset value (NAV) of the Company can be invested in securities other than from the 10 largest pharmaceutical issuers.

Holders of the Preferred Shares receive a quarterly fixed cumulative dividend in the amount of $0.125 per share to yield 5.00% per year on the issue price of $10.00. Holders of the Class A Shares receive regular monthly noncumulative distributions targeted to be $0.1031 per Class A Share to yield 8.25% per year on the issue price of $15.00. The Class A Share distributions are subject to the asset coverage test, which does not permit any distributions to holders of the Class A Shares if the NAV of the Company falls below $15.00 or if the dividends of the Preferred Shares are in arrears.

As of August 31, 2022, the downside protection available to the Preferred Shares was 57.2%. Considering the main focus of the Portfolio is the pharmaceutical industry, the underlying share prices may be sensitive to the market and industry developments. The dividend coverage ratio was 0.4 times. Regular distributions to holders of the Class A Shares, along with the Company’s operational expenses, are projected to cause an average annual portfolio grind of about 6.6% in the remaining term. To supplement Portfolio income, the Portfolio Manager engages in call option writing.

On June 7, 2021, the Company announced the establishment of an at-the-market equity program (the ATM Program) that is effective until December 4, 2022. The ATM Program allows the Company to issue up to $75 million of each of the Preferred Shares and the Class A Shares to the public from time to time at the Company’s discretion. Under the ATM Program, 166,300 Class A Shares and 166,300 Preferred Shares were issued during the year ended December 31, 2021, raising gross proceeds of $2.3 million and $1.7 million, respectively.

The redemption date for both classes of shares is December 31, 2022. The Company’s board of directors may extend the term beyond the redemption date for additional terms of five years each. On maturity, the holders of the Preferred Shares will be entitled to the value of the Portfolio up to the face value of the Preferred Shares and any accrued but unpaid dividends in priority to the holders of the Class A Shares.

Considering the credit quality and diversification of the Portfolio, as well as the amount of downside protection available to the Preferred Shares and a consistent dividend-paying history of the underlying companies in the Portfolio, DBRS Morningstar confirmed the rating on the Preferred Shares at Pfd-3 (high).

The main constraints to the rating are the following:

(1) Market fluctuations resulting from high inflation, interest rate hikes, oil prices, and global supply chain issues could further affect the Company’s NAV. The downside protection available to holders of the Preferred Shares depends on the value of the common shares held in the Portfolio.

(2) Volatility of price and changes in the dividend policies of the underlying issuers may result in significant reductions in the Preferred Shares dividend coverage or downside protection from time to time.

(3) Reliance on the manager to generate a high yield on the investment portfolio to meet distributions and other trust expenses without having to liquidate portfolio securities.

(4) The concentration of the Portfolio in one industry.

(5) Potential foreign-exchange risk because the income received on the Portfolio is not hedged.

New Issue: BEP Straight Perpetual, 5.50%

Tuesday, April 5th, 2022

Brookfield Renewable Partners L.P. has announced:

that it has agreed to issue 5,000,000 5.50% Cumulative Perpetual Class A Preferred Limited Partnership Units, Series 18 (the “Series 18 Preferred Units”) on a bought deal basis to a syndicate of underwriters led by CIBC Capital Markets, BMO Capital Markets, National Bank Financial Inc., RBC Capital Markets, Scotiabank and TD Securities Inc. for distribution to the public. The Series 18 Preferred Units will be issued at a price of C$25.00 per unit, for gross proceeds of C$125,000,000.

Holders of the Series 18 Preferred Units will be entitled to receive a fixed cumulative quarterly distribution yielding 5.50% annually. The Series 18 Preferred Units will be redeemable by Brookfield Renewable on and after April 30, 2027.

Brookfield Renewable has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 1,000,000 Series 18 Preferred Units which, if exercised, would increase the gross offering size to C$150,000,000.

The Series 18 Preferred Units will be offered in all provinces and territories of Canada by way of a prospectus supplement to Brookfield Renewable’s existing Canadian short form base shelf prospectus dated August 20, 2021. Once filed, the prospectus supplement will be available on Brookfield Renewable’s profile on SEDAR at www.sedar.com. The Series 18 Preferred Units may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements under the U.S. Securities Act.

Brookfield Renewable intends to use the net proceeds from this offering to finance and/or refinance investments made in renewable power generation assets or businesses and to support the development of clean energy technologies that constitute Eligible Investments, including the potential redemption of all or a portion of the Partnership’s Class A Preferred Limited Partnership Units, Series 11 on April 30, 2022.

The offering of Series 18 Preferred Units is expected to close on or about April 14, 2022.

I haven’t seen the prospectus supplement yet, but prospective purchasers should bear in mind that the distributions from these Preferred Units will almost certainly be relatively complex. See the BEP tax information page and especially the link to the 2021 Canadian Taxable Income Calculation (Preferred) MS-Excel spreadsheet at the bottom of this page.

Maturity Date Problem with PVS New Issue

Monday, March 21st, 2022

OK, so this is sufficiently funny and problematic enough to warrant a midday post.

As noted in both press releases quoted in the post New Issue: PVS SplitShare, 4.45%, 7-Year, the new issue “will have a final maturity of May 31, 2029”.

However, if one visits SEDAR and searches for “Partners Value Split Corp. Mar 18 2022 20:31:23 ET Prospectus (non pricing) supplement (other than ATM) – English PDF 528 K” (I’m not allowed to link it directly, because the Canadian Securities Administrators consider prospectuses and other public documents to be TOP SECRET and don’t want investor scum to have easy access), one finds an interesting definition on page S-4 (bolding from original):

Series 13 Preferred Shares may be redeemed by the Company at any time on or after May 31, 2027 and prior to May 31, 2028 (the “Series 13 Redemption Date”)

This definition may be compared with another definition on page S-14 (bolding from original):

Series 13 Preferred Shares may be redeemed by the Company at any time on or after May 31, 2027 and prior to May 31, 2029 (the “Series 13 Redemption Date”)

So not only has somebody fallen down a bit on the proofreading aspect of things, but I am a little startled to learn that big-shot Bay Street lawyers don’t have some kind of automatic editor in their prospectus writing software that would check for duplicate definitions and, ideally, make an alphabetized list that could be easily checked.

I have telephoned the company and will report back if I get an answer.

Afficionados of prospectus errors will remember the story of RY.PR.W; I have heard rumours to the effect that it was convertible to equity only by accident.

Update, 2022-3-22: No response from the company. You just can’t get help any more.

New Issue: PVS SplitShare, 4.45%, 7-Year

Thursday, March 17th, 2022

Partners Value Split Corp. has announced:

that it has entered into an agreement to sell 4,000,000 Class AA Preferred Shares, Series 13 (the “Series 13 Preferred Shares”) to a syndicate of underwriters led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets and TD Securities Inc. on a bought deal basis.

The Series 13 Preferred Shares will be issued at a price of $25.00 per share, for gross proceeds of $100,000,000. The Series 13 Preferred Shares will carry a fixed coupon of 4.45% and will have a final maturity of May 31, 2029. The Series 13 Preferred Shares have a provisional rating of Pfd-2 (low) from DBRS Limited. The net proceeds of the offering will be used by the Company to pay a special dividend on the Company’s capital shares.

The Company has granted the underwriters an option, exercisable in whole or part prior to closing, to purchase up to an additional 2,000,000 Series 13 Preferred Shares at the same offering price, which, if exercised in full, would increase the gross offering size to $150,000,000. Closing of the offering is expected to occur on or about March 25, 2022.

The Company owns a portfolio consisting of approximately 119.6 million Class A Limited Voting Shares of Brookfield Asset Management Inc. (the “Brookfield Shares”) which is expected to yield quarterly dividends that are sufficient to fund quarterly fixed cumulative preferential dividends for the holders of the Company’s preferred shares and to enable the holders of the Company’s capital shares to participate in any capital appreciation of the Brookfield Shares. Brookfield Asset Management Inc. (“BAM”) is a leading global alternative asset manager with approximately US$690 billion of assets under management across real estate, infrastructure, renewable power, private equity and credit. BAM owns and operates long-life assets and businesses, many of which form the backbone of the global economy. Utilizing its global reach, access to large-scale capital and operational expertise, BAM offers a range of alternative investment products to investors around the world—including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors. BAM is listed on the New York Stock Exchange and Toronto Stock Exchange under the symbol BAM and BAM.A respectively.

Update, 2022-3-21: The greenshoe was exercised:

Partners Value Split Corp. (the “Company”) announced today that as a result of strong investor demand for its previously announced offering, the underwriters have exercised their option to increase the size of the offering to 6,000,000 Class AA Preferred Shares, Series 13 (the “Series 13 Preferred Shares”). The Series 13 Preferred Shares will be issued at a price of $25.00 per share, for gross proceeds of $150,000,000. The Series 13 Preferred Shares are being issued on a bought deal basis to a syndicate of underwriters led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets and TD Securities Inc.

The Series 13 Preferred Shares will carry a fixed coupon of 4.45% and will have a final maturity of May 31, 2029. The Series 13 Preferred Shares have a provisional rating of Pfd-2 (low) from DBRS Limited. The net proceeds of the offering will be used to pay a special dividend on the Company’s capital shares. Closing of the offering is expected to occur on or about March 25, 2022.

New Issue: IFC Straight Perpetual, 5.25%

Monday, March 7th, 2022

Intact Financial Corporation has announced (although not yet on their website):

that it has entered into an agreement with a syndicate of underwriters led by TD Securities Inc. together with BMO Capital Markets, CIBC Capital Markets, National Bank Financial, RBC Capital Markets and Scotiabank pursuant to which the underwriters have agreed to purchase, on a bought deal basis, 4,000,000 Non-Cumulative Class A Shares, Series 11 (the “Series 11 Shares”) from Intact for sale to the public at a price of $25.00 per Series 11 Share (the “Offering Price”), representing aggregate gross proceeds of $100 million (the “Offering”).

Intact has granted the underwriters an underwriters’ option to purchase up to an additional 2,000,000 Series 11 Shares at the Offering Price, which option is exercisable at any time up to 48 hours before closing of the Offering. Should the underwriters’ option be fully exercised, the total gross proceeds of the Offering will be $150 million.

The Series 11 Shares will yield 5.25% per annum, payable quarterly, as and when declared by the Board of Directors of the Company. The Series 11 Shares will not be redeemable prior to March 31, 2027. On and after March 31, 2027, Intact may, on not less than 30 nor more than 60 days’ notice, redeem for cash the Series 11 Shares in whole or in part, at the Company’s option, at $26.00 per Series 11 Share if redeemed on or after March 31, 2027 and prior to March 31, 2028; $25.75 per Series 11 Share if redeemed on or after March 31, 2028 and prior to March 31, 2029; $25.50 per Series 11 Share if redeemed on or after March 31, 2029 and prior to March 31, 2030; $25.25 per Series 11 Share if redeemed on or after March 31, 2030 and prior to March 31, 2031; and $25.00 per Series 11 Share if redeemed on or after March 31, 2031, in each case together with all declared and unpaid dividends up to but excluding the date of redemption.

The Offering is expected to close on March 15, 2022. The net proceeds are expected to be used by Intact to fund a portion of the redemption price of all of the outstanding floating rate restricted notes (approximately $445 million, based on current exchange rates) of the Company’s subsidiary, RSA Insurance Group Limited (formerly RSA Insurance Group plc) and/or for general corporate purposes.

Thanks to Assiduous Reader skeptical for bringing this to my attention!

New Issue: CU Straight Perpetual, 4.75%

Tuesday, November 23rd, 2021

Canadian Utilities Limited has announced:

it has entered into an agreement with a syndicate of underwriters co-led by BMO Capital Markets and RBC Capital Markets, and including TD Securities Inc., Scotia Capital Inc., CIBC World Markets Inc., National Bank Financial and iA Private Wealth Inc. The underwriters have agreed to buy 7,000,000 4.75% Cumulative Redeemable Second Preferred Shares Series HH at a price of $25.00 per share for aggregate gross proceeds of $175,000,000. The proceeds will be used for capital expenditures, to repay indebtedness and for other general corporate purposes.

Canadian Utilities Limited has granted the Underwriters an option, exercisable, in whole or in part, at any time until and including 30 days following the closing of the Offering, to purchase, at the offering price, an additional 1,050,000 Series HH Preferred Shares, to cover over-allotments, if any. Should the option be fully exercised, the total gross proceeds of the Series HH Preferred Share offering will be $201,250,000.

The Series HH Preferred Shares will be issued to the public at a price of $25.00 per share and holders will be entitled to receive fixed cumulative preferential cash dividends, payable quarterly as and when declared by the Board of Directors of the Corporation at an annual rate of $1.1875 per share, to yield 4.75% annually. On or after March 1, 2027, the Corporation may redeem the Series HH Preferred Shares in whole or in part from time to time, at $26.00 per share if redeemed during the 12 months commencing March 1, 2027, at $25.75 per share if redeemed during the 12 months commencing March 1, 2028, at $25.50 per share if redeemed during the 12 months commencing March 1, 2029, at $25.25 per share if redeemed during the 12 months commencing March 1, 2030, and at $25.00 per share if redeemed on or after March 1, 2031, in each case together with all accrued and unpaid dividends up to but excluding the date fixed for redemption.

The offering is being made only in the provinces of Canada by means of a short form prospectus and the closing date of the issue is expected to be on or about December 9, 2021.

Thanks to Assiduous Readern Peculiar_Investor for ensuring I was aware of this!

New Issue: PWF Straight Perpetual 4.50%

Wednesday, October 6th, 2021

Power Corporation of Canada and Power Financial Corporation have announced:

that Power Financial has agreed to issue 8,000,000 Non-Cumulative First Preferred Shares, Series 23 in the capital of Power Financial (the “Series 23 Shares”) on a bought deal basis, for gross proceeds of $200 million. The Series 23 Shares will be priced at $25.00 per share and will carry an annual dividend yield of 4.50%. Closing is expected on or about October 15, 2021. The issue will be underwritten by a syndicate of underwriters led by BMO Capital Markets, RBC Capital Markets and Scotiabank.

The net proceeds of this offering will be used by Power Financial for general corporate purposes. Upon completion of the offering, Power Financial intends to redeem all of its outstanding $200 million First Preferred Shares, Series I.

New Issue: GWO Straight Perpetual 4.50%

Friday, October 1st, 2021

Great-West Lifeco Inc. has announced:

that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets, RBC Capital Markets, Scotiabank, CIBC Capital Markets and TD Securities pursuant to which the underwriters have agreed to purchase, on a bought deal basis, 8,000,000 Non-Cumulative First Preferred Shares, Series Y (the “Series Y Shares”) from Lifeco for sale to the public at a price of $25.00 per Series Y Share, representing aggregate gross proceeds of $200,000,000.

The Series Y Shares will yield 4.50% per annum, payable quarterly, as and when declared by the Board of Directors of the Company. The Series Y Shares will not be redeemable prior to December 31, 2026. On or after December 31, 2026, Lifeco may, on not less than 30 nor more than 60 days’ notice, redeem for cash the Series Y Shares in whole or in part, at the Company’s option, at $26.00 per share if redeemed on or after December 31, 2026 and prior to December 31, 2027; $25.75 per share if redeemed on or after December 31, 2027 and prior to December 31, 2028; $25.50 per share if redeemed on or after December 31, 2028 and prior to December 31, 2029; $25.25 per share if redeemed on or after December 31, 2029 and prior to December 31, 2030; and $25.00 per share if redeemed on or after December 31, 2030, in each case together with all declared and unpaid dividends up to but excluding the date of redemption.

The net proceeds of the offering will be used for general corporate purposes. The Series Y Share offering is expected to close on October 8, 2021 and is subject to customary closing conditions.

New Issue: EMA Straight Perpetual, 4.60%

Thursday, September 16th, 2021

Emera Incorporated has announced:

that it will issue 6,000,000 Cumulative Redeemable First Preferred Shares, Series L (the “Series L Preferred Shares”) at a price of $25.00 per share for aggregate gross proceeds of $150 million on a bought deal basis to a syndicate of underwriters in Canada led by TD Securities Inc. and CIBC Capital Markets. Emera has granted to the underwriters an option, exercisable at any time up to two business days prior to the closing of the offering, to purchase up to an additional 2,000,000 Series L Preferred Shares at a price of $25.00 per share (the “Underwriters’ Option”). If the Underwriters’ Option is exercised in full, the aggregate gross proceeds to Emera will be $200 million.

The holders of Series L Preferred Shares will be entitled to receive fixed cumulative preferential cash dividends at an annual rate of $1.15 per share, payable quarterly, as and when declared by the board of directors of the Company yielding 4.60% per annum. The initial dividend, if declared, will be payable on November 15, 2021 and will be $0.1638 per share, based on an anticipated closing date of September 24, 2021.

The Series L Preferred Shares will not be redeemable by the Company prior to November 15, 2026. On or after November 15, 2026 the Company may redeem all or any part of the then outstanding Series L Preferred Shares, at the Company’s option without the consent of the holder, by the payment of: $26.00 per share if redeemed before November 15, 2027; $25.75 per share if redeemed on or after November 15, 2027 but before November 15, 2028; $25.50 per share if redeemed on or after November 15, 2028 but before November 15, 2029;

$25.25 per share if redeemed on or after November 15, 2029 but before November 15, 2030; and $25.00 per share if redeemed on or after November 15, 2030, together, in each case, with all accrued and unpaid dividends up to but excluding the date fixed for redemption. The Series L Preferred Shares do not have a fixed maturity date and are not redeemable at the option of the holders of Series L Preferred Shares.

The offering is subject to the receipt of all necessary regulatory and stock exchange approvals. The net proceeds of the offering will be used for general corporate purposes.

The Series L Preferred Shares will be offered to the public in Canada by way of prospectus supplement to Emera’s short form base shelf prospectus dated March 12, 2021. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

They later announced:

that it has agreed to increase the size of its previously announced offering and issue 9,000,000 Cumulative Redeemable First Preferred Shares, Series L (the “Series L Preferred Shares”) at a price of $25.00 per share for aggregate gross proceeds of $225,000,000 on a bought deal basis to a syndicate of underwriters in Canada led by TD Securities Inc. and CIBC Capital Markets.

New Issue: PWI.PR.A, SplitShare, Five-Year, 5.00%

Monday, August 9th, 2021

Brompton Funds Limited has announced (on 2021-4-26):

that Sustainable Power & Infrastructure Split Corp. (the “Company”) has filed a preliminary prospectus dated March 31, 2021 in respect of an initial public offering of class A shares and preferred shares (the “Preliminary Prospectus”).

The Company will invest in a globally diversified and actively managed portfolio (the “Portfolio”) consisting primarily of dividend-paying securities of power and infrastructure companies, whose assets, products and services the Manager believes are facilitating the multi-decade transition toward decarbonization and environmental sustainability. The Portfolio will include investments in companies operating in the areas of renewable power, green transportation, energy efficiency, and communications, among others (“Sustainable Power and Infrastructure Companies”). In seeking to achieve its investment objectives, the Company intends to target investments in Sustainable Power and Infrastructure Companies that have positive and/or improving environmental, social and governance (“ESG”) characteristics as identified by the Manager.

The class A shares will be offered at a price of $10.00 per share. The investment objectives for the class A shares are to provide holders with regular monthly non-cumulative cash distributions and the opportunity for capital appreciation through exposure to the Portfolio. The monthly cash distribution is targeted to be $0.06667 per class A share representing a yield on the issue price of the class A shares of 8.0% per annum.

The preferred shares will be offered at a price of $10.00 per share. The investment objectives for the preferred shares are to provide holders with fixed cumulative preferential quarterly cash distributions and to return the original issue price of $10.00 to holders on May 29, 2026, subject to extension for successive terms of up to five years as determined by the board of directors of the Company. The quarterly cash distribution will be $0.1250 per preferred share ($0.50 per annum, or 5.0% per annum on the issue price of $10.00 per preferred share), until May 29, 2026. The preferred shares have been provisionally rated Pfd-3 by DBRS Limited.

Prospective purchasers investing in the Company will have the option of paying for shares in cash or paying for class A shares or units by an exchange of freely-tradable listed securities of any eligible issuers listed in the Preliminary Prospectus (the “Exchange Option”). Prospective purchasers who utilize the Exchange Option are required to deposit their securities of exchange eligible issuers by no later than 5:00 p.m. (Toronto time) on April 22, 2021 through CDS. Please contact your investment advisor or refer to the Preliminary Prospectus for detailed information on how to participate in the offering by way of either cash purchase or the exchange option.

The syndicate of agents for the offering is being led by RBC Capital Markets, CIBC Capital Markets, National Bank Financial Inc. and Scotiabank and includes BMO Capital Markets, TD Securities Inc., Hampton Securities Limited, Canaccord Genuity Corp., Raymond James Ltd., Richardson Wealth Limited, Echelon Wealth Partners Inc., iA Private Wealth Inc., Mackie Research Capital Corporation and Manulife Securities Incorporated.

The offering went well:

Brompton Funds Limited (the “Manager”) is pleased to announce that Sustainable Power & Infrastructure Split Corp. (the “Company”) has completed its initial public offering of 3,221,666 Class A Shares and 3,221,666 Preferred Shares for total gross proceeds of $64.4 million. The Class A Shares and Preferred Shares will commence trading today on the Toronto Stock Exchange under the symbols PWI and PWI.PR.A, respectively.

Important extracts from the prospectus include:

The investment objectives for the Preferred Shares are to provide their holders with fixed cumulative preferential quarterly cash distributions and to return the original issue price of $10.00 to holders on May 29, 2026 (the “Maturity Date”), subject to extension for successive terms of up to five years as determined by the board of directors of the Company.

The Preferred Shares have been provisionally rated Pfd-3 by DBRS Limited. See “Description of the Securities — Rating of the Preferred Shares”

Holders of record of Preferred Shares on the last Business Day of each of March, June, September and December will be entitled to receive fixed cumulative preferential quarterly cash distributions equal to $0.1250 per Preferred Share until May 29, 2026. On an annualized basis, this would represent a yield on the Preferred Share offering price of approximately 5.0%. Such quarterly distributions are expected to be paid by the Company on or
before the tenth Business Day of the month following the period in respect of which the distribution was payable. The first distribution will be pro-rated to reflect the period from the Closing Date to June 30, 2021. Based on the expected Closing Date (defined herein), the initial distribution will be $0.05632 per Preferred Share and is expected to be payable to the holders of Preferred Shares of record on June 30, 2021.

Preferred Shares may be surrendered at any time for retraction to TSX Trust Company (the “Registrar and Transfer Agent”), the Company’s registrar and transfer agent, but will be retracted only on the second last Business Day of a month (the “Retraction Date”). Preferred Shares surrendered for retraction by 5:00 p.m. (Toronto time) on the tenth Business Day prior to the Retraction Date will be retracted on such Retraction Date and the holder will be paid on or before the tenth Business Day of the following month (the “Retraction Payment Date”). Holders of Preferred Shares whose Preferred Shares are surrendered for retraction will be entitled to receive a retraction price per Preferred Share equal to 96% of the lesser of (i) the Net Asset Value per Unit determined as of such Retraction Date, less the cost to the Company of the purchase of a Class A Share for cancellation; and (ii) $10.00.

No distributions will be paid on the Class A Shares if (i) the distributions payable on the Preferred Shares are in arrears, or (ii) following cash distributions by the Company, the NAV per Unit would be less than $15.00.

DBRS finalized the rating on 2021-5-21:

The fixed distributions of dividends on the Preferred Shares will be funded from the dividends received on the common shares in the Portfolio, which are expected to cover approximately 0.7 times the annual Preferred Share distributions.

The initial downside protection available to holders of the Preferred Shares is approximately 48% (after offering expenses).