BSD.PR.A: DBRS Upgrades to Pfd-4(low)

DBRS has announced that it:

has today upgraded the Preferred Securities issued by Brookfield Soundvest Split Trust (the Trust) to Pfd-4 (low) from Pfd-5 (high).

As of September 30, 2010, the Portfolio primarily consisted of various types of income trusts. The composition of the Portfolio may change significantly in 2011 as more income trusts convert to corporations. The Portfolio provides downside protection of approximately 29% to the holders of the Preferred Securities (as of November 30, 2010).

Over the past four months, the net asset value (NAV) of the Trust has increased from $12.41 to $14.07, an increase of approximately 13%. Furthermore, the downside protection has fluctuated between 16% and 29% in 2010 to date compared with 2% to 15% from August to November 2009. This significant increase in protection has resulted in an upgrade in the rating of the Preferred Securities to Pfd-4 (low) from Pfd-5 (high). The upgrade has been limited to one notch due to the lower credit quality of the Portfolio (the majority of its holdings are not rated by any rating agency) and uncertainty related to the potential reduction in income earned on the Portfolio because of the impending taxation of Canadian income trusts.

The redemption date for the Preferred Securities is March 31, 2015.

BSD.PR.A was last mentioned on PrefBlog when an extraordinatry resolution was passed allowing the fund to invest in other instruments beside income trusts. BSD.PR.A is tracked by HIMIPref™ but is relegated to the Scraps index on credit concerns.

2 Responses to “BSD.PR.A: DBRS Upgrades to Pfd-4(low)”

  1. cal says:

    manager announced that redemptions will recommence in February. Nice pop on my prefs that I bought at 8.7. Brookfield owns >half of the equity shares. With the ability to wind-down the fund in the event total value falls below 20MM, my guess is that after this redemption the fund will be wound-down (there is a call right on the prefs).

  2. […] was last mentioned on PrefBlog when it was upgraded to Pfd-4(low) by DBRS. BSD.PR.A is tracked by HIMIPref™ but is relegated to the Scraps index on credit […]

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