Dominion Bond Rating Service has announced that it:
has today upgraded the rating of the Class B Preferred Shares (the Preferred Shares) issued by 5Banc Split Inc. (the Company) to Pfd-3 (high) from Pfd-3. In December 2006, the Company issued 14 million Preferred Shares at $10 each and an equal number of Class B Capital Shares (the Capital Shares) at $10 each. The final redemption date for the Preferred Shares and Capital Shares is December 15, 2011.
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The rating of the Preferred Shares was last confirmed on August 10, 2010. Since then, the net asset value (NAV) of the Company has increased by approximately 9%. The current downside protection (as of February 24, 2011) is approximately 49%. The upgrade of the rating of the Preferred Shares is primarily based on the increased downside protection since August 2010 and the fairly short term to final redemption of the Preferred Shares.The main constraints to the rating are the following:
(1) The downside protection provided to holders of the Preferred Shares is dependent on the value of the shares in the Portfolio.
(2) Volatility of price and changes in the dividend policies of the Canadian banks may result in significant reductions in downside protection from time to time.
(3) The Portfolio is entirely concentrated in the Canadian financial services industry.
FBS.PR.B was last mentioned on PrefBlog when there was a partial redemption call in December 2009. FBS.PR.B is tracked by HIMIPref™, but is relegated to the Scraps index on credit concerns.
[…] was last mentioned on PrefBlog when it was upgraded to Pfd-3(high) by DBRS. FBS.PR.B is tracked by HIMIPref™, but is relegated to the Scraps index on credit […]